20241216Certificate of Appeal.pdf

Idaho Public Utilities Commission Brad Little,Governor
P.O. Box 83720, Boise, ID 83720-0074 Eric Anderson,President
John R.Hammond,Jr., Commissioner
Edward Lodge,Commissioner
December 16, 2024
Via E-Mail and Interagency Mail
supremecourtdocuments&idcourts.net
Melanie Gagnepain
Clerk of the Courts
Supreme Court
451 W. State Street
Boise, Idaho 83720-0101
Re: PUC Clerk's Certificate of Appeal
Supreme Court Docket No.:
Dear Ms. Gagnepain,
Enclosed for your information and action is the Clerk's Certificate of Appeal from the Idaho
Public Utilities Commission. Also enclosed is PacifiCorp d/b/a Rocky Mountain Power's
Notice of Appeal filed on November 27, 2024. The $94 filing fee will be paid by the company
via credit card once the filing is submitted.
I have also enclosed copies of the two PUC Orders appealed from: Final Order No. 36207 and
Reconsideration Order No. 36367.
If you have any questions, please contact me at [phone].
Sincerely,
YonZ arr anchez
Commission Secretary
Enclosures
cc: Adam Triplett,Deputy Attorney General
I:\Legal\ELECTRIC\PAC-E-24-05_ECAM\SUP\S C_CwLtr_20241209.doex
P.O. Box 83720, Boise, Idaho 83720-0074 Telephone: [phone], Fax: [phone]
11331 W. Chinden Blvd., Bldg.8,Suite 201-A, Boise, Idaho 83714

BEFORE THE PUBLIC UTILITIES COMMISSION
PACIFICORP, d/b/a )
ROCKY MOUNTAIN POWER, ) Supreme Court Docket
No.
Appellant, )
VS. ) Idaho Public Utilities Commission
Case No. PAC-E-24-05
IDAHO PUBLIC UTILITIES COMMISSION, )
Respondent. )
Appeal from the Idaho Public Utilities Commission, The Honorable Eric Anderson presiding.
Case Number from Idaho Public Utilities Commission: PAC-E-24-05
Order or Judgment Appealed from: Final Order No. 36207 and Final Reconsideration Order
No. 36367
Attorney for Appellant:
Joe Dallas
Rocky Mountain Power
825 NE Multnomah, Ste. 2000
Portland, OR 97232
loseph.dallas(d pacificop2.com
Attorney for Respondent Idaho Public Utilities Commission:
Adam Triplett
Deputy Attorney General
P. O. Box 83720
Boise, Idaho 83720-0074
adam.triplett(&,puc.idaho.gov
Appealed by: PacifiCorp d/b/a Rocky Mountain Power
Appealed against: Idaho Public Utilities Commission
Notice of Appeal Filed: November 27, 2024
Notice of Cross-appeal Filed: N/A
CLERK'S CERTIFICATE OF APPEAL— I

Amended Notice of Cross-appeal Filed: N/A
Appellate Fee Paid: $94.00 (to be paid by Company via credit card once filing is submitted)
Respondent or Cross-Respondent's Appeal Request for Additional Record Filed: N/A
Respondent or Cross-Respondent's Request for Additional Reporter's Transcript Filed:
N/A
Was Agency Reporter's Transcript Requested: No
Estimated Number of Pages: N/A
If so, name of each reporter of whom a transcript has been requested as named below at
the address set out below: N/A
Dated this 161h day of December 2024.
n ca s an ez
Secretary of the Pu is Utilities Commission
CLERK'S CERTIFICATE OF APPEAL—2

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT ON THIS Wh DAY OF DECEMBER 2024, 1 CAUSED
TO BE SERVED, VIA EMAIL, THE FOREGOING Clerk's Certificate of Appeal, in IPUC
Case No. PAC-E-24-05, TO THE FOLLOWING:
PacifiCorp:
Joe Dallas
825 NE Multnomah, Ste. 2000
Portland, OR 97232
j oseph.dallas(cracificorp.com
Bayer:
Brian C. Collins
Thomas J. Budge Greg Meyer
Racine Olson, PLLP Brubaker&Associates
P.O. Box 1391; 201 E. Center 16690 Swingley Ridge Rd., #140
Pocatello, ID 83204-1391 Chesterfield, MO 63017
tj&racineolson.com bcollins(a),consultbai.com
gme er&consultbai.com
PIIC:
Ronald L. Williams Bradley Mullins
Brandon Helgeson MW Analytics
Hawley Troxell Ennis & Hawley LLP brmullins(d),mwanalytics.com
P.O. Box 1617
Boise, ID 83701 Val Steiner
rwilliams(khawleytroxell.com Itafos Conda, LLC
bhel eg sonAhawleytroxell.com val.steinerAitafos.com
Kyle Williams
BYU Idaho
williamsk(kbyui.edu
al B o S
Commission Secre
;:�7
CLERK'S CERTIFICATE OF APPEAL—3

Office of the Secretary
Service Date
May 31,2024
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN ) CASE NO. PAC-E-24-05
POWER'S APPLICATION FOR APPROVAL )
OF $62.4 MILLION ECAM DEFERRAL ) ORDER NO. 36207
On April 1, 2024, PacifiCorp dba Rocky Mountain Power ("Company") applied for
authorization to adjust its rates under the Energy Cost Adjustment Mechanism ("ECAM"). The
Company seeks an order approving approximately $62.4 million in ECAM deferred costs and a
10.5 percent increase to Electric Service Schedule No. 94, Energy Cost Adjustment ("Schedule
94"). If the adjustment is approved, the monthly bill of an average residential customer using 783
kilowatt-hours of electricity would increase by about$7.39. The Company requested its proposed
adjustment be processed by Modified Procedure and become effective on June 1, 2024.
On April 13,2024,the Commission issued a Notice of Application and Notice of Modified
Procedure, establishing public comment and Company reply deadlines. Order No. 36153. P4
Production LLC., an affiliate of Bayer Corporation ("P4"), and PacifiCorp Idaho Industrial
Customers ("PIIC"), intervened. Order Nos. 36161 and 36176.
Commission Staff("Staff'), P4, PIIC, (collectively the "Parties"), and one member of the
public filed comments. The Company responded to Staffs, P4's, and PIIC's comments.
Having reviewed the record,the Commission approves the Company's Application in part.
Specifically,we disallow recovery of costs the Company incurred to comply with the Washington
Climate Commitment Act and authorize a revised ECAM deferral amount of$60,093,960.
BACKGROUND
The ECAM allows the Company to increase or decrease its rates each year to reflect
changes in the Company's power supply costs. These costs vary by year with changes in the
Company's fuel (gas and coal) costs, surplus power sales, power purchases, and associated
transmission costs. Each month, the Company tracks the difference between the actual net power
costs ("NPC") it incurred to serve customers, and the embedded (or base) NPC it collected from
customers through base rates. The Company defers the difference between actual NPC and base
NPC into a balancing account for later disposition at the end of the yearly deferral period. At that
time, the ECAM allows the Company to credit or collect the difference between actual NPC and
ORDER NO. 36207 1

base NPC through a decrease or increase in customer rates. Neither the Company nor its
shareholders will receive any financial return because of this filing.
THE APPLICATION
Besides the NPC difference described above, this year's ECAM includes: (1) the Load
Change Adjustment Revenues ("LCAR"); (2) an adjustment for coal stripping costs;' (3) a true-
up of 100% of the incremental Renewable Energy Credit ("REC") revenues; (4) Production Tax
Credits ("PTC"); (5) reasonable energy price ("REP") qualifying facility ("QF") adjustment;2 (6)
wind availability liquidation damages; and(7) interest on the deferral.
With its Application, the Company seeks an order approving the Company's: (1) request
for a$62.4 million ECAM deferral; and(2)a 10.5 percent increase for Schedule 94. The Company
states that if its proposal is approved,prices for customer classes would increase as follows:
• Residential Schedule 1 —(7.6%)
• Residential Schedule 36, Optional Time-of-Day Service—(8.7%)
• General Service Schedule 6—(10.7%)
• General Service Schedule 9—(13.1%)
• Irrigation Customers—(9.5%)
• General Service Schedule 23 —(9.0%)
• General Service Schedule 35 —(10.3%)
• Public Street Lighting—(5.2%)
• Tariff Contract, Schedule 400—(13.5%)
STAFF COMMENTS
1. ECAM Analysis and Calculation
Staff recommended the Commission authorize a lower 2023 ECAM deferral than the
Company proposed. Staff noted that the Company included additional costs incurred to comply
with Washington's Climate Commitment Act ("WCCA") in its proposed ECAM deferral. Staff
believed inclusion of these costs was not fair,just, or reasonable because it effectively imposes a
unilateral tax on Idaho customers. Accordingly, Staff recommended removing the WCCA costs
' The ECAM includes a"90/10 sharing band"in which customers pay/receive 90 percent of the increase/decrease in
the difference between actual NPC and base NPC,LCAR,and the coal stripping costs;and the Company incurs/retains
the remaining 10 percent.Application at 3.
z The REP QF adjustment flows from the 2020 Inter-Jurisdictional Allocation Protocol where, during the Interim
Period,"energy output of New QF PPAs will be dynamically allocated. . .using the SG Factor,priced at a forecasted
[REP] . . .and any cost of a New QF PPA above the forecasted[REP]will be situs assigned and allocated to the State
of Origin."Direct Testimony of Jack Painter at 10 ("Painter Direct");Order No.34640.
ORDER NO. 36207 2

from the proposed ECAM deferral, reducing it by approximately $2.3 million for a total revised
deferral amount of about $60.1 million.
Staff reviewed the other aspects of the Company's calculation of the 2023 ECAM for
compliance with previous Commission orders and accuracy in reported actual loads, prudence in
incurred actual costs and revenues, and correct application of loads, costs,and revenues embedded
in base rates. Staff also reviewed the Company's hedge contracts to ensure they safeguard price
and fuel stability.
The NPC to serve Idaho customers in 2023 was $149 million but the revenue collected
through base rates was only$85.7 million—leaving a$63.3 million under collected balance.3 After
accounting for the 90/10 band, customers are responsible for$57.2 million through the ECAM.
The Emerging Issues Taskforce ("EITF") an adjustment measuring the difference
between coal stripping costs incurred and recorded—increased the deferral by $60,594.
The LCAR adjusts for the over- or under-recovery of"fixed energy-classified production
cost (excluding NPC) resulting from the difference between Idaho sales used to determine base
rates and the sales from the deferral year." Staff Comments at 4. A LCAR of$8.74/MWh was set
in Case No. PAC-E-21-07 and the Company collected approximately $30.5 million through the
LCAR. The difference between this amount and the $30.8 million embedded in base rates
increased the ECAM deferral by $268,994.
Under Order No. 35277, the PTC true-up is $4.16/MWh. In 2023, a $13.6 million PTC
benefit from the ECAM fell short of the $14.6 million allocation to Idaho customers. The
difference between embedded PTCs and actual PTCs results in a$907,177 surcharge to customers
collected through the ECAM.
A rate of$0.07/MWh in REC revenues was set in Order No. 35277. In 2023, base rates
included$239,273 in benefits,but Idaho's actual share of REC revenues was $357,308 higher than
included in rates. This amount will offset the deferral balance.
s The NPC embedded in rates is set at $24.54 per megawatt-hour ("MWh"). To calculate the amount of revenue
collected through base rates the Company multiples the embedded per MWh cost by total MWhs sold. $24.54 x
3,495,580 MWh=$85.7 million.
ORDER NO. 36207 3

Per the 2020 protocol, all QF contracts approved in 2020 and thereafter became subject to
a REP adjustment.4 Idaho has 11 QF contracts that fall under the REP adjustment which resulted
in a $1.5 million increase to the Idaho deferral in 2023.
The ECAM also included a $310,085 credit for a wind availability liquidated damages
credit. This credit represents Idaho's share of the liquidated damages the Company receives from
suppliers of repowered wind facilities failure to meet required specifications.
2. Analysis of Actual NPC
Staff reported that, on a system wide basis, actual NPC was 85.2 percent higher than base
NPC in 2023. Focusing specifically on Idaho, actual NPC was 75.3 percent above base rate
recovery. Despite these increases, Staff believed the Company generally operated prudently in the
face of a difficult deferral period. Staff based this conclusion on its analysis of (1) the actual
amounts of energy delivered and costs incurred relative to base amounts embedded in rates for the
deferral period; and (2) the reasonableness of the unit downtime for Company's generation
resources.
Staff s analysis led it to believe that the high NPC in 2023 arose largely from lower than
forecast generation from the Company's lowest cost energy resources(i.e.,hydro,coal, and wind),
resulting in heavier reliance on gas generation and market purchases to meet customer's demand
for energy. Staff believed a lack of available wind and hydro resources during the deferral period
caused the reduction in zero-fuel cost hydro and wind generation.Regarding coal generation, Staff
believed coal supply issues and transmission constraints between the Bridger coal plant and loads
to the west diminished generation.
The Company's reliance on gas generation and market purchases exacerbated matters as
the actual prices for this energy were 47 percent and 64.1 percent higher than that forecasted in
base rates. Furthermore, the shortfall in hydro, wind, and coal generation also resulted in
diminished Company sales into the wholesale market—a traditional means of offsetting actual
NPC to customers. However, Staff noted that some of the discrepancy between forecast and actual
sales arose from inaccuracies in the modeling used for base rates, which the Company intends to
improve during its next general rate case.
4"The amount the Company paid for energy under each QF contract over a reasonable energy price would be SITUS
(state)allocated to the state that approved the QF contract."Staff Comments at 5;citing Painter Direct at 10.
ORDER NO. 36207 4

According to Staff,the Company made prudent decisions in taking resources out of service
for various reasons. Despite noting significant downtime for the "Prospect 3"hydro unit and five
Swift hydro units, Staff believed the Company had legitimate reasons for the downtime its
resources experienced and that they were out of service for a reasonable period.
3. Proposed Rates
The Company proposed raising Schedule 94 rates by approximately 101.1 percent,
increasing base rate revenue by 10.5 percent. Staff verified that the Company's underlying
calculations for these rates are accurate and comply with prior Commission orders. However, Staff
recommended a lower proposed rate increase that reflects the removal of the costs for complying
with the WCCA. Specifically, Staff proposed a 93.7 percent increase in Schedule 94 rates, which
would raise base rate revenue by 9.7 percent. Under Staff s proposed rate, a typical Schedule 1
customer's monthly bill would increase by $6.85.
P41S COMMENTS
P4 focused its comments on two costs the Company proposed for inclusion in the ECAM
deferral and subsequent recovery from customers. First, like Staff, P4 opposed the recovery of
costs for complying with the WCCA. Second, P4 also opposed the recovery of costs for
compliance with the Ozone Transport Rule ("OTR").
1. WCCA Costs
P4 presented essentially the same rationale as Staff for opposing recovery of costs
associated with WCCA. That is, WCCA compliance costs arose from the actions of a single state
(i.e., Washington) and, therefore, that state should bear them. However, P4 cited some additional
persuasive authority supporting this argument.
P4 noted that the Wyoming Public Service Commission ("WPSC") recently denied the
Company's request to recover from Wyoming customers the cost of purchasing Greenhouse Gas
allowances to comply with the WCCA.S In doing so, the WPSC rejected an argument that the cost
of complying with the WCCA were analogous to Wyoming's wind tax and, therefore, subject to
allocation to all states under the 2020 PacifiCorp Inter-Jurisdictional Allocation Protocol ("2020
Protocol"). The WPSC determined that the WCCA is a state-specific initiative that was akin to a
5 See In re the Application of Rocky Mountain Power for Authority to Increase Its Retail Electric Service Rates by
Approximately$140.2 Million Per Year or 21.6Percent and to Revise the Energy Cost Adjustment Mechanism. WPSC
Docket No.20000-63 3-ER-23,Memorandum Opinion,Finding,and Order¶211 (Jan.2,2024).
ORDER NO. 36207 5

renewable portfolio standard("RPS")as the legislative intent behind the WCCA is to reduce fossil
fuel generation. Because such portfolio standards are undisputedly situs under the 2020 protocol,
the WPSC reasoned that the WCCA should be also.6
2. The OTR
P4 described the OTR as the final plan of the Environmental Protection Agency ("EPA")
to limit emissions of nitrogen oxides in 23 states, including Utah and Wyoming. However,
according to P4, the Utah Attorney General sued the EPA, seeking to overturn the OTR, and the
Tenth Circuit stayed the federal plan. Accordingly, P4 opposed recovery of what it considered
unnecessary expenses to comply with the OTR, describing the costs as unrelated to any operating
condition the Company had to satisfy addressing emissions of nitrogen oxides.7
PIIC'S COMMENTS
PIIC similarly focused its comments on two issues. First, like Staff and P4, PIIC opposed
the recovery of costs for complying with the WCCA. Second, PIIC recommended amortizing the
proposed rate increase over three years to mitigate any overlap between that increase and the
Company's next general rate case.
1. WCCA Costs
PIIC opposed the Company recovering costs it incurred to comply with the WCCA.
However, according to PIIC, the WCCA resulted in more costs to the Company than the $42
million spent to purchase greenhouse gas allowances. Specifically, PIIC asserted that the cost of
the allowances affected the dispatch of energy from the Chehalis power plant, resulting in an
inefficient dispatch of generation. Due to the time constraints of this case, PIIC could not perform
the analysis necessary to estimate the effect of this inefficiency. However, PIIC noted that this
dispatch cost was estimated to be $9,559,205 on a company-wide basis in the Company's 2023
general rate case in Wyoming.
In addition to the dispatch efficiency issue, PIIC also opposed the Company's recovery of
the cost of WCCA allowances, arguing that the Company included the expenses in the ECAM by
improperly recording them in Federal Energy Regulatory Commission ("FERC") Account 555,
6 P4 also noted that the Oregon Public Utility Commission denied recovery of WCCA costs from Oregon customers,
reasoning that such costs are part of a state-specific initiative properly allocated to Washington.See In re PacifiCorp,
dba Pacific Power, 2024 Transition Adjustment Mechanism,OPUC Docket No.UE 420,Order No.23-404(Oct.27,
2023).
7 P4 indicated the Company is seeking recovery of approximately$17 million for the OTR on a system basis.
ORDER NO. 36207 6

Purchased Power. PIIC argued that the costs for the allowances have nothing to do with purchased
power and should, therefore, be recorded in FERC Account 509, Allowances, which are not
included in the ECAM. Thus, PIIC reasoned that, regardless of the reasonableness of purchasing
the allowances, they cannot be included in the ECAM because the Company did not request
inclusion of FERC Account 509 in the ECAM and any change to the mechanism can only be
prospective.
Respecting the reasonableness of the allowances themselves, PIIC noted that the
Commission's prior decision to exclude WCCA costs from rates in Order No. 36015 is consistent
with other jurisdictions that have addressed the issue. The Oregon Public Utility Commission
("OPUC") did not allow the Company to include the cost of WCCA allowances in its 2024
Transition Adjustment Mechanism ("TAM") filing.$ As previously noted, the WPSC also denied
recovery of the WCCA allowances in the Company's 2023 general rate case.
PIIC also noted that, because of the separate allocation framework applicable to Chehalis
and no-cost allowances provided to Washington residents,the Company could potentially recover
allowance costs covering 112 percent of the cost of Chehalis from other states. For all the above
reasons, PIIC recommended that the Commission deny recovery of all costs incurred to comply
with the WCCA.
2. Amortization Period
PIIC also requested that the Commission amortize the rate increase proposed in this case
over three years. PIIC asserted that this will lead to more stable long-term rates by spreading the
increase over a three-year period, mitigating both the immediate impact of the increase and
diminishing any compounding rate effects from the Company's upcoming rate case. In support of
this proposal,PIIC noted that not only will the base NPC be reset in the Company's upcoming rate
case, but the price for natural gas has dropped and the issues the Company faced with its coal
operations have largely been resolved. Thus, PIIC indicated that it expects a significant decline in
the Company's ECAM deferrals going forward, reducing the likelihood of future rate pancaking
if the increase is amortized over three years.
Additionally,PIIC noted that it was not seeking to amortize the entire$62.4 million ECAM
deferral amount. Rather, it sought only to amortize the increase in the ECAM. Thus,under PIIC's
s PIIC describes the TAM as a docket that forecasts and establishes the NPC for the coming year.The OPUC's decision
to denying recovery of the allowances is currently on appeal to the Oregon Court of Appeals.
ORDER NO. 36207 7

proposal, the Company would recover $43,133,607 beginning on June 1, 2024, an approximate
3.5% rate increase. The Company would then recover an additional $10,886,666 in its next two
ECAM filings.
PUBLIC COMMENTS
One member of the public commented requesting the Commission deny the Company's
Application.
COMPANY REPLY COMMENTS
The Company disagreed with the other Parties' recommendation to disallow recovery of
costs it incurred to comply with the WCCA. The Company argued that disallowing recovery of
these costs would violate fundamental ratemaking and constitutional principles. Alternatively, the
Company argued that the Commission should remove the generation benefits of Chehalis from the
deferral balance if recovery of the WCCA compliance costs for operating the facility are
disallowed.
The Company contended that disallowing recovery of WCCA costs from Idaho customers
would violate the fundamental ratemaking principle of cost-causation. The Company reasoned
Chehalis benefits Idaho customers despite the additional WCCA compliance costs to operate it.
Because no party disputed the prudence of procuring WCCA allowances to operate Chehalis, the
Company reasoned Idaho customers should bear the actual costs of Chehalis generation from
which they benefit.
The Company also argued that the WCCA is like other taxes imposed by the federal and
other state governments on the Company. The Company warned that if policy shifts to Idaho
customers paying only for costs imposed by the state of Idaho, then it will become very difficult
for the Company to serve its Idaho customers with out-of-state resources. In support of this
argument, the Company cited the Wyoming wind tax, which is system allocated under the 2020
Protocol.
The Company further argued that denying recovery of the cost of complying with the
WCCA violates the dormant Commerce Clause by discriminating against the Company for
engaging in interstate commerce. Specifically, the Company contended that disallowing WCCA
costs would give Idaho customers an advantage and burden interstate commerce to the Company's
detriment.
ORDER NO. 36207 8

The Company also reasoned that the WCCA costs were properly allocated to Idaho under
the 2020 Protocol as a"System Resource." The Company observed that,under the 2020 Protocol,
generation resources are either"State Resources"or System Resources. Within the 2020 Protocol,
a Resource includes Company-owned generating units, like Chehalis.Under Section 3.1.2.1 of the
2020 Protocol,a Resource can be a State Resource when the resource was acquired to comply with
a"State-Specific Initiative."Because the Company did not acquire the physical Chehalis plant in
accordance with a State-specific initiative, the Company reasoned the subsequent acquisition of
greenhouse gas allowances to operate it under Washington state law did not convert it to a State
Resource.
The Company disagreed with PIIC's argument that WCCA costs should be recorded in
FERC Account 509. According to the Company, federal law currently in effect provides that only
allowances for sulfur dioxide emission should be recorded into FERC Account 509. Although a
recent change to federal regulations may require other allowances to be recorded into FERC
Account 509, that change will not be effective until January 1, 2025, and is not intended to impact
retail rates. See Accounting and Reporting Treatment of Certain Renewable Energy Assets, 183
FERC¶61,205, Order No. 898 (2023).
The Company also opposed P4's recommendation to disallow costs for complying with the
OTR. The Company noted that in preparing to comply with the OTR(which was to take effect on
August 4, 2023) it altered its thermal generating resources and dispatch through power purchases.
The Company represented that these efforts led to approximately$17 million in prudently incurred
costs. Although a stay from Tenth Circuit Court of Appeals one week before the implementation
date of the OTR relieved the Company the obligation to incur further compliance costs going
forward, the Company asserted that did not render imprudent the $17 million of costs already
incurred to prospectively comply with the OTR.
Finally, the Company opposed PIIC's three-year amortization proposal for two reasons.
First, amortizing incurred fuel expenses would impose regulatory lag on the Company's recovery
of those costs. The Company noted that the ECAM was designed for single-year recovery and,
despite the significant increase, that design should be honored. Second, extended recovery would
impose additional interest expenses and future price uncertainty on customers. Currently, the
ECAM imposes annual interest expenses on customers and, in the current environment, delaying
recovery could result in significant costs to customers in the form of higher interest costs.
ORDER NO. 36207 9

COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over the Company's Application and the issues in this
case under Title 61 of the Idaho Code including, Idaho Code §§ 61-501, -502, and -503. The
Commission is empowered to investigate rates, charges,rules,regulations,practices, and contracts
of all public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provisions of law, and to Ex the same by order. Idaho Code
§§ 61-501, -502, and-503.
Based upon a review of the record, we find it fair, just, and reasonable to approve the
Company's Application with some exceptions. First, the Commission is particularly concerned
with, and ultimately rejects, the Company's request to recover WCCA compliance costs and
hereby disallows the recovery of WCCA costs. Second, we also reject P4's and PIIC's
recommendations to disallow recovery of the costs the Company incurred to comply with the OTR
and to amortize recovery of the amount of the ECAM deferral exceeding that embedded in base
rates over three years, respectively. Each of these contested issues are discussed more thoroughly
below.
1. WCCA Compliance Costs
The WCCA establishes regulatory requirements reducing certain greenhouse gas ("GHG")
emissions from generating plants in Washington State. One component of the WCCA is a Cap and
Invest Program, which establishes an initial limit (or "cap") on GHG emissions in Washington
State. RCW §§ 70A.65.005 through 70A.65.901. The Washington Department of Ecology
("WDE") maintains and enforces the cap through the auctioning and subsequent retirement of a
limited number of"allowances." See RCW § 70A.65.090(7)(a) (requiring a compliance account
through which allowances are transferred to the WDE for retirement); RCW § 70A.65.100
(requiring the WDE to distribute allowances via auctions).Each allowance authorizes the emission
of one metric ton of carbon dioxide equivalent. See RCW § 70A.65.010(1). To ensure that certain
legislative emissions limits are met, the WDE will issue a steadily decreasing number of
allowances in coming years. See RCW § 70A.65.070.
Although the WDE must allow for secondary transfer of purchased allowances to the
greatest extent possible, see id., the auctions are considered the "linchpin" of the cap-and-invest
program that will generate "substantial revenue that must, by law be invested in critical climate
projects throughout" in Washington State. Dep't of Ecology State of Wash.,
ORDER NO. 36207 10

https:Hecology.wa.gov/air-climate/climate-commitmentact/auction-proceeds (last visited May 28,
2024); see also RCW §§ 70A.65.100, 70A.65.230, 70A.65.240, 70A.65.250, 70A.65.260,
70A.65.270, 70A.65.280.
The Company owns and operates a natural gas-fired generating facility in Chehalis,
Washington, that exports a portion of the electricity it generates there to Idaho customers. The
Chehalis facility emits carbon dioxide for which the Company must purchase and retire allowances
through the WDE.Although the WDE provides some allowances to the Company for the Chehalis
facility at no cost, these no-cost allowances must be allocated only to Washington State retail
customers. See RCW §§ 70A.65.110, 70A.65.120, 70A.65.130. The Company seeks authorization
to recover about $2.3 million from Idaho customers—an amount representing Idaho's
jurisdictional share of the cost to purchase the remaining allowances necessary to operate the
Chehalis facility and export electricity to customers outside of Washington.
We conclude that allowing recovery of costs incurred to comply with the WCCA from
Idaho customers would violate the 2020 Protocol, which governs the allocation of costs and
benefits of Company resources (including Company-owned generating facilities like the Chehalis
facility) across the jurisdictions in which the Company operates.9
We reject the Company's argument that the costs it incurred to comply with the WCCA
are like other taxes imposed on the Company, like the Wyoming Wind Tax. See Wyo. Stat. Ann. §
39-22-104 (imposing a tax of$1.00 on every MWh of wind energy generated in state). Rather,we
conclude the WCCA is more akin to an RPS as it is designed to reduce the use of fossil fuel
generation to serve load. The 2020 Protocol defines a"Portfolio Standard"as "a law or regulation
that requires [the Company] to acquire . . . [r]esources in a prescribed manner." 2020 Protocol,
Section 3.1.2.1. Although the Company owned the Chehalis generating facility before the WCCA
was enacted, it lost the right to operate it to generate electricity to serve customers outside of
Washington State without purchasing allowances when the legislation became effective. The
Company did not acquire that right again until after it obtained allowances as prescribed by the
Washington State legislature. The costs of resource procurement standards like this are situs-
assigned under the 2020 Protocol. Thus, costs the Company incurred to comply with the WCCA
are appropriately assigned to customers in Washington State.
9 The 2020 Protocol was approved in Order No. 34640.
ORDER NO. 36207 11

Other aspects of the WCCA buttress this conclusion. For example, the Washington State
legislature does not fix the cost of allowances like other taxes. Rather, that cost is determined at
an auction conducted by the WDE. Moreover,while isolated WCCA provisions might resemble a
tax or generation-dispatch costs,the complete statutory scheme goes beyond this by providing no-
cost allowances to Washington State retail customers alone.
The WDE discussed the rationale behind the provision of these no-cost allowances in
federal district court litigation concerning the WCCA. Specifically, the WDE indicated that the
no-cost allowances were linked to another Washington State climate initiative, stating:
[T]he Clean Energy Transformation Act (CETA), requires utilities serving
Washington customers to reduce their greenhouse gas emissions to neutral by 2030
and to zero by 2045. Critically, these requirements do not apply to generation for
out-of-state customers. Thus, the function of the no cost allowances in the Climate
Commitment Act is to avoid double-charging Washington customers for the costs
of the energy transition to non-emitting generation.10
The same year CETA requires the complete elimination of fossil-fuel generators from the
portfolios of electric utilities, the provision of cost-free allowances under the WCCA ends. Thus,
the CETA and WCCA work together to implement a state-specific initiative by creating portfolio
standards under CETA and then distributing no-cost allowances to CETA-obligated utilities
through the WCCA. The 2020 Protocol is designed and intended to isolate such state-specific
policy costs and recover those costs from customers in the states where the policies are created.
2. OTR Compliance Costs
We find it fair,just, and reasonable to allow the Company to recover from Idaho customers
Idaho's jurisdictional share of the costs incurred to comply with the OTR,a federal rule. Although
the Company did not ultimately have to comply with the OTR, that does not retroactively render
imprudent the costs it incurred preparing to comply.Nor does the record show that the Company's
preparations to comply with the OTR were otherwise imprudent.
3. Amortization of Recovery
We also find it fair,just, and reasonable to allow the Company to recover the 2023 ECAM
deferral in a single year.Although the deferral is substantial, amortizing its recovery is not without
additional costs or additional risks for customers. For example, interest would continue to accrue
"Invenergy Thermal LLC, and Grays Harbor Energy LLC v. Laura Watson, in her official capacity as Director of
the Washington State Department of Ecology,Defendant,("Invenergy v. Ecology")Defendant's Motion to Dismiss,
(Feb. 16,2023),Western District of Washington Case No. 3:22-cv-05967.
ORDER NO. 36207 12

on the uncollected deferral over the course of the amortization period, increasing the total amount
recovered from customers. Additionally, the Company could be faced with another substantial
ECAM deferral in the next two years, while it is still recovering part of the 2023 deferral. If this
hypothetical occurred, customers would incur additional interest costs only to obtain pancaking
rates. Moreover, the ECAM was designed for single-year recovery of deferred costs. Considering
the cost and risk a three-year amortization would entail,we find it reasonable to honor the original
design of the 2023 ECAM in this case and allow the Company to recover the ECAM deferral
allowed here in a single year.
In sum, we disallow recovery of the costs the Company incurred to comply with the
WCCA, approve$60,093,960 million in deferred costs from the deferral period beginning January
1, 2023, through December 31, 2023, and a corresponding increase to Electric Service Schedule
No. 94, Energy Cost Adjustment. Because these amounts differ from those proposed in the
Application, we direct the Company to submit as a compliance filing a revised Schedule No. 94
tariff reflecting the amounts approved in this Order within 15 days.
ORDER
IT IS HEREBY ORDERED that the Company's Application for deferred costs from the
deferral period beginning January 1, 2023, through December 31, 2023, in a revised amount of
$60,093,960 (which excludes costs incurred to comply with the WCCA) is approved, effective
June 1, 2024.
IT IS FURTHER ORDERED that the Company submit within 15 days of the issuance of
this order a revised Schedule No. 94 tariff reflecting the amounts approved in this Order as a
compliance filing.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date upon this Order regarding any
matter decided in this Order. Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. See Idaho Code §§ 61-
626.
ORDER NO. 36207 13

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 31St day of
May 2024.
ERIC ANDERSON, PRESIDENT
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J R. HAMMOND JR., COMMISSIONER
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Commission Secretary
I:\Legal\ELECTRIC\PAC-E-24-05_ECAM\orders\PACE2405_final_at.docx
ORDER NO. 36207 14

Office of the Secretary
Service Date
October 18,2024
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN ) CASE NO. PAC-E-24-05
POWER'S APPLICATION FOR APPROVAL )
OF $62.4 MILLION ECAM DEFERRAL ) ORDER NO. 36367
On April 1, 2024, PacifiCorp dba Rocky Mountain Power ("Company") applied for
authorization to adjust its rates under the Energy Cost Adjustment Mechanism ("ECAM"). The
Company sought an order approving approximately $62.4 million in ECAM deferred costs and a
10.5 percent increase to Electric Service Schedule No. 94, Energy Cost Adjustment ("Schedule
94"). If the adjustment were approved as filed,the monthly bill of an average residential customer
using 783 kilowatt-hours of electricity would increase by about$7.39. The Company requested its
proposed adjustment be processed by Modified Procedure and become effective on June 1, 2024.
On May 31, 2024, the Commission issued a Final Order that disallowed recovery of costs
incurred to comply with the Washington Climate Commitment Act ("WCCA") and authorized a
revised ECAM deferral amount of$60,093,960. Order No. 36207.
On June 21, 2024, the Company filed a Petition for Reconsideration ("Petition") of Order
No.36207.The Company argued the Commission erred by(1)misinterpreting the 2020 PacifiCorp
Inter-Jurisidictional Protocol ("2020 Protocol") in various ways; (2) impermissibly separating the
costs and benefits of its natural gas-fired generating facility in Chehalis,Washington("Chehalis");
and (3) discriminating against the Company for engaging in interstate commerce. Alternatively,
the Company asserted that the Commission should revise Order No. 36207 to exclude both the
costs and benefits of Chehalis from Idaho customers' rates—effectively removing Chehalis from
service of Idaho customers.
On July 19, 2024, the Commission granted the Company's Petition, setting comment
deadlines, authorizing the parties to submit additional evidence, and posing some initial questions
for the Company to answer. Order No. 36247. The Company responded to the questions the
Commission posed, and then Commission Staff("Staff') filed comments to which the Company
replied with argument and additional evidence.
Having reviewed the record in its entirety and additional arguments lodged by the Parties
on reconsideration, we now issue this Order denying the Company's Petition.
ORDER NO. 36367 1

ORDER NO. 36207
As stated, Order No. 36207 authorized the Company to recover only $60,093,960 of the
approximately$62.4 million in ECAM deferred costs sought in its Application. The only expense
for which the Commission disallowed recovery was costs the Company incurred to comply with
the WCCA. As relevant to this disallowance, Order No. 36207 provides:
We conclude that allowing recovery of costs incurred to comply with the WCCA
from Idaho customers would violate the 2020 Protocol, which governs the
allocation of costs and benefits of Company resources (including Company-owned
generating facilities like the Chehalis facility) across the jurisdictions in which the
Company operates.
We reject the Company's argument that the costs it incurred to comply with the
WCCA are like other taxes imposed on the Company,like the Wyoming Wind Tax.
See Wyo. Stat. Ann. § 39-22-104 (imposing a tax of$1.00 on every MWh of wind
energy generated in state). Rather, we conclude the WCCA is more akin to [a
Renewable Portfolio Standard] as it is designed to reduce the use of fossil fuel
generation to serve load. The 2020 Protocol defines a "Portfolio Standard" as "a
law or regulation that requires [the Company] to acquire . . . [r]esources in a
prescribed manner."2020 Protocol, Section 3.1.2.1. Although the Company owned
the Chehalis generating facility before the WCCA was enacted, it lost the right to
operate it to generate electricity to serve customers outside of Washington State
without purchasing allowances when the legislation became effective. The
Company did not acquire that right again until after it obtained allowances as
prescribed by the Washington State legislature. The costs of resource procurement
standards like this are situs-assigned under the 2020 Protocol. Thus, costs the
Company incurred to comply with the WCCA are appropriately assigned to
customers in Washington State.
Order No. 36207 at 11 (Footnotes omitted.)
Order No. 36207 cited other aspects of the WCCA that support this conclusion.
Specifically, Order No. 36207 noted that the cost of WCCA allowances is determined in an
auction, not by the Washington state legislature as with other taxes. Moreover, despite
acknowledging that isolated WCCA provisions resemble a tax or generation-dispatch costs, the
Commission reasoned that the provision of no-cost allowances to the Company only for customers
served in Washington state distinguished the WCCA from a tax.
Order No. 36207 also examined the link between the WCCA and another Washington state
climate initiative—the Clean Energy Transformation Act ("CETA"). Washington state officials
have indicated in federal court proceedings that no-cost allowances are provided under the WCCA
ORDER NO. 36367 2

to ensure that Washington customers do not bear the costs associated with transitioning to non-
greenhouse gas emitting generation under both the WCCA and CETA. Order No. 36207 reasoned
that the portfolio standards established under CETA and provision of no-cost allowances under
WCCA constituted a state-specific initiative for which Idaho customers should not bear the cost.
The Commission noted that costs for such state-specific policies should be allocated to customers
served in the state creating the policies.
STAFF COMMENTS ON RECONSIDERATION
Staff urged the Commission to reject the Company's request to reconsider the disallowance
of WCCA compliance costs associated with Chehalis. According to Staff,the Commission did not
err by concluding that these costs result from a Portfolio Standard, making them properly situs
assigned to Washington under the 2020 Protocol. Furthermore, Staff argued that, even if the
WCCA is not a Portfolio Standard, the Commission should not authorize recovery of costs to
comply with it because doing so would not be fair, just, and reasonable. Consequently, Staff
recommended that the Commission neither allow the Company to recover WCCA compliance
costs, nor remove the benefits of generation from Chehalis from Idaho rates.
1. The WCCA is a Portfolio Standard.
Staff argued that the Commission properly concluded that the WCCA is a Portfolio
Standard under the 2020 Protocol. In support of this argument, Staff noted that the 2020 Protocol
defines a "Portfolio Standard" as, among other things, "a law or regulation that requires [the
Company] to acquire . . . Resources in a prescribed manner."2020 Protocol Section 3.1.2.1. Staff
characterized the Company's reading of Order No. 36207 as implying that WCCA allowances are
discrete "Resources"under the 2020 Protocol.
However, Staff believed it more reasonable to interpret Order No. 36207 as the
Commission concluding that the WCCA deprived the Company of the right to lawfully operate
Chehalis to generate electricity without obtaining and retiring allowances as required by the
WCCA. That is, Staff interpreted Order No. 36207 as expressing a Commission determination that
the WCCA effectively rendered Chehalis inoperable as an electric generation facility unless the
Company obtained allowances. Consequently, Staff reasoned that the Commission's conclusion
that the WCCA was a Portfolio Standard under the 2020 Protocol was not error.
ORDER NO. 36367 3

2. Including WCCA compliance costs in Idaho rates is not fair,just, and reasonable.
Staff further argued that allowing the Company to recover WCCA compliance costs
violates two principles underpinning the 2020 Protocol. According to Staff, the 2020 Protocol
contemplates the fair allocation of costs between the states the Company serves while minimizing
the rate effects of state-specific policies, like the WCCA. Because allowing recovery of WCCA
compliance cost violates both these principles, Staff contended that allowing such recovery would
not be fair,just, and reasonable. Consequently, Staff asserted that the Commission should disallow
recovery of such costs, even if the WCCA is not a Portfolio Standard under the 2020 Protocol. In
support of this argument, Staff noted that the 2020 Protocol does not limit the Commission's
authority to determine whether rates are fair,just, and reasonable or to consider changes in laws,
regulations, or circumstances on inter jurisdictional allocation policies when evaluating rates.
Although inclusion of certain out-of-state generation taxes in Idaho rates has been deemed
fair,just, and reasonable, Staff distinguished such taxes from WCCA compliance costs. Staff cited
the Wyoming Wind Tax as an example of such a tax included in Idaho rates. The Wyoming Wind
Tax is a flat tax imposed on all wind energy generated in Wyoming, including that consumed in
Wyoming. See Wyo. Stat. Ann. § 39-22-104. The WCCA, however, provides no-cost allowances
for generation serving Washington ratepayers only, essentially exempting Washington residents
from WCCA compliance costs. RCW §§ 70A.65.110, 70A.65.120, 70A.65.130. Consequently,
Staff asserted that the Commission should disallow recovery of WCCA compliance costs under
Section 1 of the 2020 Protocol, even if other provisions of the 2020 Protocol would require
allocation of such costs to Idaho.
Staff also contrasted WCCA compliance costs with the treatment of rates for Public Utility
Regulatory Policies Act ("PURPA") Qualifying Facilities ("QF") under the 2020 Protocol. If the
price of a QF exceeds reasonable energy prices, the 2020 Protocol requires that any amount
exceeding the reasonable energy price be situs assigned to the state authorizing the QF contract.
2020 Protocol Section 4.4.2.1. Staff reasoned that overpriced QF rates are, as a practical matter,
like WCCA compliance costs because the Washington legislature artificially inflated the price of
exported energy generated at Chehalis by requiring the Company to first purchase allowances for
exported generation. Accordingly, Staff argued that the WCCA should receive similar treatment
to QF rates under the 2020 Protocol.
ORDER NO. 36367 4

3. Disallowing recovery of WCCA compliance costs does not violate the Dormant
Commerce Clause.
Staff also challenged the Company's assertion that disallowing recovery of WCCA
compliance costs impermissibly discriminates against the Company as an interstate utility in
violation of the Dormant Commerce Clause. In this vein, Staff again noted that Washington state
provides the Company with no-cost allowances to cover electricity generated by Chehalis
distributed to Washington customers. Washington state does this to insulate its residents from the
cost for complying with both the CETA and the WCCA which the Company would pass on.
However, Staff asserted that on its face the disparity between the $42 million of WCCA
compliance costs the Company incurred in 2023 and the $336,219 of CETA compliance costs the
Company incurred the same year suggested that Washington state's choice to offer no-cost
allowances favored its own residents instead of equalizing compliance costs. Accordingly, Staff
argued that any Dormant Commerce Clause violation associated with WCCA compliance costs
occurred when the Company initially incurred the costs.
4. The impact of removing Chehalis from Idaho rates.
Staff also challenged the Company's calculation of the impact to Idaho ratepayers if
Chehalis' generation is removed from Idaho rates. According to the Company,removing Chehalis
from Idaho rates would increase Idaho's Net Power Cost ("NPC") by $23.6 million. However,
Staff took exception with the Company's inclusion of the capacity deficiency penalty from the
Western Resource Adequacy Program("WRAP")to calculate replacement capacity.According to
Staff,the Company would not actually be capacity deficient if Chehalis were removed from Idaho
rates. Rather, Staff argued the Company would be reallocating existing generation to Idaho
ratepayer's detriment. Consequently, Staff reasoned that incurring the capacity deficiency penalty
would be unreasonable. Without including the capacity penalty, the capacity costs of removing
Chehalis drops from $119 million on a system basis to $46 million on an Idaho basis.
Staff also disagreed with the Company's use of the hourly Mid-Columbia("Mid-C")prices
to replace the energy supplied by Chehalis. Instead, Staff proposed using the monthly average cost
per megawatt-hour of gas generation on the Company's system because WRAP replacement costs
are based on a replacement gas plant. Staff asserted that this would reduce the costs of replacing
Chehalis by $99 million on a system basis.
ORDER NO. 36367 5

Alternatively,if the Commission deems the cost of gas generation improper, Staff proposed
using the Company's eastern Balancing Area Authority (`BAA") Locational Marginal Price
("LMP") from the Energy Imbalance Market ("EIM") (or the Energy Day Ahead Market when
that becomes available). Staff believed this rate to be more appropriate than Mid-C market prices,
as the Company would purchase replacement power from the LMP.If LMP prices are used instead
of Mid-C, that would reduce the Company's estimated cost for replacing Chehalis by about $67
million on a system basis. Using LMP prices reduces the replacement energy cost from $190
million to $123 million on a system basis.
Staff also disagreed with the Company's use of rate base and expenses from 2020 when
calculating the cost of removing Chehalis from Idaho rates. Staff noted that the Company has a
general rate case pending before the Commission (Case No. PAC-E-24-04) in which it has
provided updated fuel costs from 2023. Using the updated 2023 fuel costs would increase the cost
of removing Chehalis by about $242,000.'
According to Staff s calculations, the total cost of removing Chehalis from Idaho rates
would be $4.3 million if monthly average gas cost is used or $2.6 million using the LMP price
from the EIM. Staff suggested that removing Chehalis entirely from Idaho rates could cost as little
as $2.6 million further demonstrated that including $2.4 million in WCCA compliance costs in
Idaho rates is not fair,just, and reasonable.
COMPANY REPLY COMMENTS ON RECONSIDERATION
The Company challenged Staffs interpretation of the WCCA as effectively depriving the
Company of the right to lawfully operate Chehalis. According to the Company, the text of the
WCCA and its associated regulations do not support this interpretation. In this vein,the Company
noted that the WCCA is generally enforced with financial penalties—not injunctions that would
stop facilities from generating power. Additionally, the Company argued that interpreting the
WCCA as having deprived it of a property right in Chehalis could have unforeseen consequences
on future proceedings.
Similarly, the Company challenged Staffs assertion that the WCCA is a Portfolio
Standard under the 2020 Protocol. Specifically, the Company stated that the WCCA is not a
1 Staff further noted that the Company omitted capacity costs for three months and miscalculated capacity costs for
another month.
ORDER NO. 36367 6

Portfolio Standard because it does not require the Company to procure a Resource, much less
procure it in a prescribed manner. Rather, the Company viewed the WCCA as discouraging the
construction of new greenhouse gas emitting generation facilities.
The Company further argued that conferring the benefits of Chehalis to Idaho customers
without paying for its full prudent costs is not fair,just,and reasonable.According to the Company,
disallowing the recovery of prudent expenses (like WCCA compliance costs) without removing
the benefits conflicts with the 2020 Protocol and pre-existing fundamental ratemaking principles.
The Company also disputed Staff s analysis of the impact of removing Chehalis from Idaho
rates. First, the Company asserted that removing Chehalis would increase Idaho NPC by $7.9
million. After challenging various aspects of Staffs analysis, the Company asserted that its
calculations should be used to determine the cost of removing Chehalis from Idaho rates.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over the Company's Application and the issues in this
case under Title 61 of the Idaho Code including, Idaho Code §§ 61-501, -502, and -503. The
Commission is empowered to investigate rates, charges,rules,regulations,practices, and contracts
of all public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provisions of law, and to fix the same by order. Idaho Code
§§ 61-501, -502, and-503.
Under Idaho Code§ 61-626,the Commission may abrogate or change one of its orders that
it determines after reconsideration is unjust, unwarranted, or should be changed. This permits the
Commission to correct any errors in the original order before appellate review. See Washington
Water Power Co. v. Kootenai Env'tAll., 99 Idaho 875, 879, 591 P.2d 122, 126 (1979). A petition
for reconsideration must state why the order to be reconsidered, or any issued decided therein, is
unreasonable, unlawful, erroneous, or not in conformity with the law. IDAPA 31.91.01.331.01.
After reviewing the entire record in this case, including the comments, additional materials that
were filed,and arguments provided by the parties on reconsideration,we sustain our prior decision
disallowing recovery of WCCA compliance costs for the reasons set forth below.
1. WCCA compliance costs are properly allocated to Washington State under the
2020 Protocol
The 2020 Protocol is a method of allocating components of the Company's service between
the jurisdictions in which it operates for use in the Company's rate setting proceedings. The 2020
ORDER NO. 36367 7

Protocol was developed by commission staff members, regulatory agencies, and other interested
groups from states in which the Company operates for use on an interim basis while a long-term
allocation and assignment method was developed. The Commission initially approved the 2020
Protocol in Order No. 34640, and subsequently extended its approval through December 31,2025,
in Order No. 35984.
The 2020 Protocol allocates the costs and benefits of a Company-owned generating facility,
like Chehalis,by first assigning the facility to one of two categories: "State Resources"or"System
Resources." 2020 Protocol, Section 3.1.2. Under the 2020 Protocol, State Resources consist of
only "Demand-Side Management Programs," "Portfolio Standards," and "State-Specific
Initiatives."The 2020 Protocol allocates the costs associated with a Portfolio Standard that exceed
those the Company otherwise would have incurred to the jurisdiction that adopted the Portfolio
Standard. 2020 Protocol, Section 3.1.2.1. Stated differently, the 2020 Protocol requires a state to
bear the additional costs resulting from a Portfolio Standard. However,the 2020 Protocol does not
contain a specific provision expressly allocating the benefits of a Portfolio Standard.
In Order No. 36207, we concluded that the WCCA, at least as applied to electric utilities,
is akin to a Portfolio Standard and, therefore, the cost to comply with it should be allocated to
Washington state. Understanding why this is so,requires an understanding of both the structure of
the WCCA and its peculiar application to electric utilities. The WCCA aims to reduce greenhouse
gas emissions by instituting a"cap and invest program."RCW§ 70A.65.005, .010(58), .060—.080.
The WCCA empowers the Washington Department of Ecology ("WDE") to cap emissions of
certain greenhouse gases by large emitters—called"covered entities."RCW§ 70A.65.080(1). The
Company qualifies as a covered entity because of the greenhouse gas emissions from Chehalis.
Covered entities must obtain and retire allowances for every metric ton of carbon dioxide
gas equivalent they emit under the WCCA. See RCW § 70A.65.010(1) (defining an"Allowance"
as authorization to emit up to one metric ton of carbon dioxide equivalent). Failure to do so can
result in the imposition of"penalty allowances" or monetary sanctions ranging from $10,000 to
$50,000 per day, depending on the violation. See RCW 70A.65.200(2)—(5); Washington
Administrative Code("WAC") 173.446-610(2)—(6). Generally, covered entities obtain allowances
through auctions the WDE conducts.See RCW§ 70A.65.100.The WDE then uses the funds raised
in the auctions on climate change and environmental justice projects offered exclusively in
Washington state. RCW § 70A.65.100(7), .230. However, electric utilities subject to CETA (like
ORDER NO. 36367 8

the Company)receive some allowances for free.RCW§ 70A.65.110-130. Essentially,the WCCA
and WDE regulations provide electric utilities with free allowances to cover the forecasted
emissions associated with servicing customers in Washington State. WAC 173-446-230. The
purpose of these no-cost allowances is to protect customers in Washington from paying the
incremental costs associated with transitioning to non-greenhouse gas emitting generation
resulting from both CETA and the WCCA. See RCW § 70A.65.120(1). The Washington state
legislature chose to provide no-cost allowances for Washington customers only. In sum, the
WCCA requires the Company to obtain and retire allowances to operate Chehalis to generate
electricity. Some of these allowances the Company must pay for while it receives others
specifically those applied to generation to serve customers in Washington state—for free.
The next issue we must address is how the above-described statutory scheme interacts with
the 2020 Protocol. Staff contends that the WCCA constitutes a Portfolio Standard under the 2020
Protocol, the costs of which are properly allocated to Washington state. As stated, the 2020
Protocol allocates the costs of a Portfolio Standard that exceed the costs the Company otherwise
incurred to the jurisdiction that adopted the Portfolio Standard. 2020 Protocol, Section 3.1.2.1. The
2020 Protocol defines a Portfolio Standard as "a law or regulation that requires [the Company] to
acquire: (a) a particular type of Resource, (b) a particular quantity of Resources, (c) Resources in
a prescribed manner, or (d) Resources located in a particular geographic area." 2020 Protocol,
Appendix A at 6 (defining "Portfolio Standard"). Although Chehalis is a "Resource" under the
2020 Protocol, the greenhouse gas allowances the Company had to obtain to operate Chehalis are
not. See 2020 Protocol, Appendix A at 7 (defining the term "Resource" to mean "a Company-
owned generating unit,plan,mine, long-term Wholesale Contract, Short-Term Purchase and Sale,
Non-firm Purchase and Sale, or QF contract."). Consequently, to determine whether the WCCA
constitutes a Portfolio Standard, we must consider its effects on the Company's relationship with
Chehalis.
It is undisputed that the Company owned Chehalis prior to enactment of the WCCA. It is
also undisputed that the WCCA did not deprive the Company of legal title to Chehalis. However,
as described above, the Company could not operate Chehalis without obtaining allowances via
purchase at auction, provision of free allowances, involuntary imposition of penalty allowances,
or some other means. In other words, the WCCA prescribes processes the Company must follow
to operate Chehalis to produce electricity (e.g., obtaining and retiring allowances).
ORDER NO. 36367 9

The remaining question we must address is whether the WCCA required the Company to
"acquire" Chehalis by obtaining greenhouse gas allowances. The Company contends it does not
because (1)the Company owned Chehalis before the WCCA went into effect; and(2)the WCCA
does not mandate the acquisition of any Resource. We disagree. The Company does not acquire a
Resource within the context of a Portfolio Standard only by obtaining ownership of it. Indeed,
contracts for the purchase and sale of power,which are not tangible property subject to ownership,
are Resources under the 2020 Protocol. Id. Considering this, we conclude that the Company has
not acquired a Resource under the 2020 Protocol if it does not have the right to lawfully employ
the Resource to provide electrical service to customers without complying with the WCCA.
Accordingly, we affirm our conclusion from Order No. 36207 that the Company lost the
right to lawfully operate Chehalis to generate electricity without obtaining allowances when the
WCCA became effective. The Company reacquired this right by obtaining WCCA allowances as
prescribed by the Washington state legislature. Consequently, the costs the Company incurred to
comply with the WCCA that exceed the cost the Company otherwise would have incurred (e.g.,
the cost of purchasing allowances) are appropriately assigned to customers in Washington state.
2. Allowing the recovery of WCCA compliance costs in Idaho rates would not be
fair,just, and reasonable.
The 2020 Protocol was designed to provide an allocation method that would result in the
setting of fair,just, and reasonable rates for the Company's electric service based on a variety of
scenarios.The 2020 Protocol specifically considered the treatment in rates of state-specific policies
and portfolio standards and how those would be allocated between the states. Section 1 of the 2020
Protocol expressly provides that it is not "intended to abrogate any Commission's right or
obligation to: (1) determine fair, just, and reasonable rates based upon applicable laws and the
record established in rate proceedings conducted by the Commission;" or"(2) consider the effect
of changes in laws, regulations, or circumstances on inter jurisdictional allocation policies and
procedures when determining fair,just, and reasonable rates. . . ." 2020 Protocol, Section I at 3.
For the reasons set forth below, even if the 2020 Protocol would otherwise result in the recovery
of WCCA compliance costs through Idaho rates, we decline to authorize such recovery because
doing so would not be fair,just, and reasonable.
The Company contends that allowing Idaho customers the benefit of Chehalis' generation
without paying a share of WCCA compliance costs conflicts with the ratemaking principle of cost
ORDER NO. 36367 10

causation. This principle generally holds the customer responsible for the costs associated with
providing the Company's service. However, even in the 2020 Protocol the principle of cost
causation has not been applied in the rigid manner the Company urges. For example,the treatment
of rates for PURPA QFs under the 2020 Protocol shows that the principle of cost causation does
not compel allocation of single state's artificial inflation of energy prices to all the Company's
customers on a system basis.
Under the 2020 Protocol, costs of a QF power purchase agreement("PPA") executed after
December 31, 2019, which are above the forecasted reasonable energy price are allocated to the
state that approved the PPA (situs assigned to the state where the QF is located). 2020 Protocol
Section 4.4.2.1. If a state happens to have inflated QF rates for whatever reason, customers in the
state where that QF is located pay for the inflated costs of complying with the rates authorized by
the state commission for QFs in that state. This ensures states that do not offer high rates for QFs
are not required to pay for another state's inflated QF rates. QF and WCCA compliance costs are
similar in both formation and effect. Both arise from a single state's unilateral decision, and both
artificially inflate costs to generate or supply electricity. Accordingly, it follows that, like
overpriced QF rates, the amount the WCCA increased the costs the Company otherwise would
have incurred should be allocated to the jurisdiction that caused the increase (i.e., Washington).
Furthermore, allowing the Company to recover WCCA compliance costs from Idaho
customers would conflict with one of our primary functions: preventing rate discrimination.
Although not directly applicable in this case, Idaho Code § 61-315 prohibits public utilities in
Idaho from charging discriminatory rates or maintaining unreasonable rate disparities. Allowing
the Company to recover WCCA compliance costs would, in practical effect, result in the creation
of discriminatory customer classes,consisting of the Company's Idaho customers who would have
to pay for greenhouse gas allowances and the Company's Washington customers who would not.
In sum, requiring Idaho ratepayers to bear the cost of a unilateral Washington policy
decision that is not equally applied to its own residents is not fair,just, and reasonable which is in
direct conflict with Idaho Code § 61-502. Similar discriminatory cost increases authorized by
another state would not be recoverable for Idaho customers under the 2020 Protocol.Accordingly,
even the WCCA were not a Portfolio Standard under the 2020 Protocol, we would not allow
recovery of such costs in Idaho rates because doing so is not just and reasonable. See Idaho Code
§ 61-301 (requiring all rates charged by public utilities to be just and reasonable).
ORDER NO. 36367 11

3. Disallowing the recovery of WCCA compliance costs in Idaho rates does not
violate the Dormant Commerce Clause.
The Company argues that disallowing recovery of WCCA compliance costs violates the
Dormant Commerce Clause of the United States Constitution. Article I, Section 8, clause 3 of the
United States Constitution grants Congress authority"[t]o regulate commerce ... among the several
states...." The clause also has a negative, or "dormant," aspect, implicitly preempting state
interference with interstate commerce. United Haulers, Assn, v. Oneida Herkimer Solid Waste
Mgmt. Auth., 550 U.S. 330, 338 (2007).
The Dormant Commerce Clause protects markets and market participants. Gen. Motors
Corp. v. Tracy, 519 U.S. 278, 300(1997). Thus,the Dormant Commerce Clause is inapplicable in
the absence of(1)actual or prospective competition between entities in an identifiable market; and
(2) state action expressly discriminating against or unduly burdening interstate commerce. Id.
Additionally, this impact cannot be merely incidental. United States v. Lopez, 514 U.S. 549, 559
(1995).
The Company contends that disallowing recovery of WCCA compliance costs violates the
Dormant Commerce Clause because doing so has the practical effect of discriminating against it
for engaging in interstate operations. This misstates the focus of the Dormant Commerce Clause
analysis. As indicated above, a Dormant Commerce Clause violation arises from state action
discriminating against interstate commerce. Id. Thus, it is critical to differentiate between state
actions that discriminate or burden interstate commerce and those that distribute the effects of
discrimination or burdens imposed by another state.
The Company asserts that, if we do not permit it to pass on to Idaho customers costs that
were already imposed by Washington state, we would be effectively discriminating against
interstate commerce. We disagree. Any decision we make regarding the recovery of WCCA
compliance costs in Idaho rates will not impose a new burden on the Company. Regardless of
whether we allow the Company to pass the costs of greenhouse gas allowances for its Chehalis
emissions to Idaho customers, the Company will remain the entity required to obtain allowances
under the WCCA. The only thing that will change is the identity of the party to the interstate
transaction bearing the ultimate financial burden. However, any decision we make allocating that
cost will not burden interstate commerce anymore than it already is. Additionally, the WCCA
facially discriminates against out-of-state interests by providing no-cost allowances to the
ORDER NO. 36367 12

Company for greenhouse gas emissions generated to serve Washington customers without
providing the same no-cost allowances for emissions associated with serving the retail load of the
Company's other jurisdictions. Allowing the Company to pass the WCCA compliance costs it
incurred to Idaho customers would not eliminate this discrimination against interstate commerce.
It would merely shift the effects of the discrimination from the Company to Idaho customers.
Consequently, the Company's argument that disallowing recovery of WCCA compliance costs
violates the Dormant Commerce Clause fails.
4. Removing the benefits of Chehalis from Idaho rates would not be fair, just, and
reasonable.
The Company argues,in the alternative,that the Commission should remove the generation
benefits of Chehalis from the deferral balance if recovery of the WCCA costs for operating the
facility are disallowed. Based on our conclusion that the WCCA compliance costs the Company
incurred are properly allocated to Washington state, we further conclude that it would not be fair,
just, and reasonable to remove the benefits of Chehalis' generation from Idaho rates due to the
disallowance of those costs.
ORDER
IT IS HEREBY ORDERED that, for the reasons stated above, the Company's Petition for
Reconsideration is DENIED.
THIS IS A FINAL ORDER ON RECONSIDERATION.Any party aggrieved by this Order
may appeal to the Supreme Court of Idaho pursuant to the Public Utilities Law and the Idaho
Appellate Rules. See Idaho Code § 61-627.
ORDER NO. 36367 13

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 18th day of
October 2024.
ERIC ANDERSON, PRESIDENT
J017
R. HAMMOND JR., COMMISSIONER
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EDWARD LODGE, COMNVSIONER
ATTEST:
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Commission Secreta
I:\Legal\ELECTRIC\PAC-E-24-05_ECAM\orders\PACE2405_final2_at.docx
ORDER NO. 36367 14

_ ROCKY MOUNTAIN 1407 W.North Temple,Suite 330
POWER. Salt Lake City,UT 84116
A DIVISION OF PACIFICORP RECEIVED
Wednesday, November 27, 2024
IDAHO PUBLIC
November 27, 2024 UTILITIES COMMISSION
VIA ELECTRONIC DELIVERY
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd
Building 8 Suite 201A
Boise, ID 83714
RE: CASE NO. PAC-E-24-05
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER
REQUESTING APPROVAL OF $62.4 MILLION ECAM DEFERRAL
Attention: Commission Secretary
Please find Rocky Mountain Power's Notice of Appeal in the above referenced matter.
Informal inquiries may be directed to Mark Alder, Idaho Regulatory Manager at(801) 220-2313.
Very truly yours,
Joe Steward 9tz
Senior Vice President, Regulation

Joe Dallas (ISB# 10330)
825 NE Multnomah, Suite 2000
Portland, OR 97232
Telephone: [phone]
Email:joseph.dallas(ibpacificorp.com
Attorney for Appellant PacifiCorp dba Rocky
Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
PacifiCorp dba Rocky Mountain Power,
Case No. PAC-E-24-05
Appellant,
NOTICE OF APPEAL
V.
Idaho Public Utilities Commission,
Respondent.
TO: THE ABOVE NAMED RESPONDENT, IDAHO PUBLIC UTILITIES
COMMISSION, AND THE PARTY'S ATTORNEY (Adam Triplett, P.O. Box 83720, Boise,
Idaho 83720-0074) AND THE CLERK OF THE IDAHO PUBLIC UTILITIES COMMISSION.
NOTICE IS HEREBY GIVEN THAT:
1. The above named Appellant PacifiCorp (through Rocky Mountain Power)
("PacifiCorp") appeals against the above named Respondent Idaho Public Utilities Commission
(the "Commission") to the Idaho Supreme Court from the Commission's Order on May 31,
2024, and its Order Denying Reconsideration on October 18, 2024 (the "Orders"), signed by
President Eric Anderson, Commissioner John R. Hammond, Jr., and Commissioner Edward
Lodge. Copies of the Orders are attached to this notice.
NOTICE OF APPEAL - 1

2. PacifiCorp has a right to appeal to the Idaho Supreme Court, and the judgments or
orders described in paragraph 1 above are appealable orders under and pursuant to Idaho Code
§ 61-627 and Idaho Appellate Rules 4, 11(e), and 14(b).
3. PacifiCorp offers the following preliminary statement of the issues on appeal,
provided that the list of issues on appeal shall not prevent PacifiCorp from asserting other issues
on appeal:
• Whether the Commission failed to properly apply the 2020 PacifiCorp
Inter-Jurisdictional Allocation Protocol, which was adopted by the
Commission.
• Whether the Commission failed to set just and reasonable rates under
Idaho Code § 61-301.
4. Has an order been entered sealing all or any portion of the record?No.
5. Is a reporter's transcript requested?No. There is no transcript because there was
no hearing.
6. PacifiCorp requests the following documents to be included in the agency's
record, in addition to those documents automatically included under Idaho Appellate Rule 28:
• PacifiCorp filings: (1) Reply Comments, dated May 21, 2024; (2)
Compliance Filings, dated June 6, 2024; (3)Work Paper, dated June 6,
2024; (4) Petition for Reconsideration, dated June 21, 2024; (5) Response
to Interlocutory Order Questions, dated July 26, 2024; (6) Errata to
Response to Interlocutory Order Questions, dated August 21, 2024; (7)
Reply Comments, dated September 20, 2024.
• Commission Staff filings: (1) Decision Memo, dated April 9, 2024; (2)
Staff Comments, dated May 14, 2024; (3) Decision Memo, dated June 25,
2024; (5) Comments, dated September 6, 2024.
• Bayer Corporation filings: (1)Petition to Intervene, dated April 12, 2024;
and(2) Comments, dated May 13, 2024.
• PacifiCorp Idaho Industrial Customers filings: (1) Petition to Intervene,
dated April 26, 2024; and(2) Comments, dated May 14, 2024.
NOTICE OF APPEAL - 2

• Commission Orders and Notices: (1)Notice of Application Order No.
36153, dated April 23, 2024; (2) Intervention Order No. 36161, dated May
1, 2024; (3) Intervention Order No. 36176, dated May 15, 2024; (4) Final
Order No. 36207, dated May 31, 2024; (5) Interlocutory Order No. 36274,
dated July 19, 2024; (6) Reconsideration Order No. 36367.
• Case Files: (1) Application Painter Direct Testimony(redacted), dated
April 1, 2024; and(2) Meredith Workpaper, dated April 1, 2024.
7. I certify:
(a) That payment for the estimated fee for preparation of the agency's record
has been sent to the Commission.
(b) That the payment appellate filing fee has been sent to the Commission.
(c) That service has been made upon all parties required to be served pursuant
to Idaho Appellate Rule 20 (and the attorney general of Idaho pursuant to
Idaho Code § 67-1401(1)).
DATED: November 27, 2024
Joe Dallas (ISB# 10330)
825 NE Multnomah, Suite 2000
Portland, OR 97232
Telephone: [phone]
Email:joseph.dallas(&,pacificorp.com
Attorney for Appellant PacifiCorp dba Rocky
Mountain Power
NOTICE OF APPEAL - 3

CERTIFICATE OF SERVICE
I hereby certify that on this day,November 27, 2024, I caused to be served, via email, a
true and correct copy of Notice of Appeal in Case No. PAC-E-24-05 to the following:
Commission Staff
Adam Triplett
Deputy Attorney General
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg No. 8
Suite 201 A
Boise, ID 83720-0074
adam.tri left uc.idaho. ov
Bayer Corporation
Thomas J. Budge Brian C. Collins
Racine, Olson PLLP Greg Meyer
201 E. Center Brubaker&Associates
Pocatello, ID 83204-1391 16690 Swingley Ridge Rd., #140
tinracineolson.com Chesterfield, MO 63017
bcollinskconsultbai.com
me er consultbai.com
PacifiCorp Idaho Industrial Customers
Ronald L. Williams Bradley Mullins
Brandon Helgeson MW Analytics
Hawley Troxell Ennis &Hawley LLP Teitotie 2, Suite 208
PO Box 1617 Oulunsalo Finland, FI 90460
Boise, ID 83701 brmullins(d),mwanaltyics.com
rwilliamskhawleytroxell.c om
bhel eson e hawle troxell.com
Val Steiner Kyle Williams
Itafos Conda LLC BYU Idaho
val.steiner@,lLtafos.com williamsk b i.edu
Idaho Attorney General
Raul R. Labrador
Idaho Attorney General
Office of Attorney General
P.O. Box 83720
Boise, ID 83720-0010
AGLabrador a .idaho. ov
Carrie Meyer
Adviser, Regulatory Operations
NOTICE OF APPEAL - 4

ATTACHMENT
ORDER NO. 36207 (MAY 31, 2024)
AND
ORDER NO. 36367 (OCTOBER 18, 2024)

Office of the Secretary
Service Date
May 31,2024
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN ) CASE NO. PAC-E-24-05
POWER'S APPLICATION FOR APPROVAL )
OF $62.4 MILLION ECAM DEFERRAL ) ORDER NO. 36207
On April 1, 2024, PacifiCorp dba Rocky Mountain Power ("Company") applied for
authorization to adjust its rates under the Energy Cost Adjustment Mechanism ("ECAM"). The
Company seeks an order approving approximately $62.4 million in ECAM deferred costs and a
10.5 percent increase to Electric Service Schedule No. 94, Energy Cost Adjustment ("Schedule
94"). If the adjustment is approved, the monthly bill of an average residential customer using 783
kilowatt-hours of electricity would increase by about $7.39. The Company requested its proposed
adjustment be processed by Modified Procedure and become effective on June 1, 2024.
On April 13,2024,the Commission issued a Notice of Application and Notice of Modified
Procedure, establishing public comment and Company reply deadlines. Order No. 36153. P4
Production LLC., an affiliate of Bayer Corporation ("P4"), and PacifiCorp Idaho Industrial
Customers ("PIIC"), intervened. Order Nos. 36161 and 36176.
Commission Staff("Staff'), P4, PIIC, (collectively the "Parties"), and one member of the
public filed comments. The Company responded to Staff s, P4's, and PIIC's comments.
Having reviewed the record,the Commission approves the Company's Application in part.
Specifically,we disallow recovery of costs the Company incurred to comply with the Washington
Climate Commitment Act and authorize a revised ECAM deferral amount of$60,093,960.
BACKGROUND
The ECAM allows the Company to increase or decrease its rates each year to reflect
changes in the Company's power supply costs. These costs vary by year with changes in the
Company's fuel (gas and coal) costs, surplus power sales, power purchases, and associated
transmission costs. Each month, the Company tracks the difference between the actual net power
costs ("NPC") it incurred to serve customers, and the embedded (or base) NPC it collected from
customers through base rates. The Company defers the difference between actual NPC and base
NPC into a balancing account for later disposition at the end of the yearly deferral period. At that
time, the ECAM allows the Company to credit or collect the difference between actual NPC and
ORDER NO. 36207 1

base NPC through a decrease or increase in customer rates. Neither the Company nor its
shareholders will receive any financial return because of this filing.
THE APPLICATION
Besides the NPC difference described above, this year's ECAM includes: (1) the Load
Change Adjustment Revenues ("LCAR"); (2) an adjustment for coal stripping costs;' (3) a true-
up of 100% of the incremental Renewable Energy Credit ("REC") revenues; (4) Production Tax
Credits ("PTC"); (5) reasonable energy price ("REP") qualifying facility ("QF") adjustment;2 (6)
wind availability liquidation damages; and(7) interest on the deferral.
With its Application, the Company seeks an order approving the Company's: (1) request
for a$62.4 million ECAM deferral; and(2)a 10.5 percent increase for Schedule 94. The Company
states that if its proposal is approved,prices for customer classes would increase as follows:
• Residential Schedule 1 —(7.6%)
• Residential Schedule 36, Optional Time-of-Day Service— (8.7%)
• General Service Schedule 6—(10.7%)
• General Service Schedule 9 —(13.1%)
• Irrigation Customers—(9.5%)
• General Service Schedule 23 —(9.0%)
• General Service Schedule 35 —(10.3%)
• Public Street Lighting—(5.2%)
• Tariff Contract, Schedule 400—(13.5%)
STAFF COMMENTS
1. ECAM Analysis and Calculation
Staff recommended the Commission authorize a lower 2023 ECAM deferral than the
Company proposed. Staff noted that the Company included additional costs incurred to comply
with Washington's Climate Commitment Act ("WCCA") in its proposed ECAM deferral. Staff
believed inclusion of these costs was not fair,just, or reasonable because it effectively imposes a
unilateral tax on Idaho customers. Accordingly, Staff recommended removing the WCCA costs
' The ECAM includes a"90/10 sharing band"in which customers pay/receive 90 percent of the increase/decrease in
the difference between actual NPC and base NPC,LCAR,and the coal stripping costs;and the Company incurs/retains
the remaining 10 percent.Application at 3.
z The REP QF adjustment flows from the 2020 Inter-Jurisdictional Allocation Protocol where, during the Interim
Period,"energy output of New QF PPAs will be dynamically allocated. . .using the SG Factor,priced at a forecasted
[REP] . . .and any cost of a New QF PPA above the forecasted[REP]will be situs assigned and allocated to the State
of Origin."Direct Testimony of Jack Painter at 10 ("Painter Direct");Order No.34640.
ORDER NO. 36207 2

from the proposed ECAM deferral, reducing it by approximately $2.3 million for a total revised
deferral amount of about $60.1 million.
Staff reviewed the other aspects of the Company's calculation of the 2023 ECAM for
compliance with previous Commission orders and accuracy in reported actual loads, prudence in
incurred actual costs and revenues, and correct application of loads, costs,and revenues embedded
in base rates. Staff also reviewed the Company's hedge contracts to ensure they safeguard price
and fuel stability.
The NPC to serve Idaho customers in 2023 was $149 million but the revenue collected
through base rates was only$85.7 million—leaving a$63.3 million under collected balance.3 After
accounting for the 90/10 band, customers are responsible for$57.2 million through the ECAM.
The Emerging Issues Taskforce ("EITF") an adjustment measuring the difference
between coal stripping costs incurred and recorded—increased the deferral by $60,594.
The LCAR adjusts for the over- or under-recovery of"fixed energy-classified production
cost (excluding NPC) resulting from the difference between Idaho sales used to determine base
rates and the sales from the deferral year." Staff Comments at 4. A LCAR of$8.74/MWh was set
in Case No. PAC-E-21-07 and the Company collected approximately $30.5 million through the
LCAR. The difference between this amount and the $30.8 million embedded in base rates
increased the ECAM deferral by $268,994.
Under Order No. 35277, the PTC true-up is $4.16/MWh. In 2023, a $13.6 million PTC
benefit from the ECAM fell short of the $14.6 million allocation to Idaho customers. The
difference between embedded PTCs and actual PTCs results in a$907,177 surcharge to customers
collected through the ECAM.
A rate of$0.07/MWh in REC revenues was set in Order No. 35277. In 2023, base rates
included$239,273 in benefits,but Idaho's actual share of REC revenues was $357,308 higher than
included in rates. This amount will offset the deferral balance.
s The NPC embedded in rates is set at $24.54 per megawatt-hour ("MWh"). To calculate the amount of revenue
collected through base rates the Company multiples the embedded per MWh cost by total MWhs sold. $24.54 x
3,495,580 MWh=$85.7 million.
ORDER NO. 36207 3

Per the 2020 protocol, all QF contracts approved in 2020 and thereafter became subject to
a REP adjustment.4 Idaho has 11 QF contracts that fall under the REP adjustment which resulted
in a $1.5 million increase to the Idaho deferral in 2023.
The ECAM also included a $310,085 credit for a wind availability liquidated damages
credit. This credit represents Idaho's share of the liquidated damages the Company receives from
suppliers of repowered wind facilities failure to meet required specifications.
2. Analysis of Actual NPC
Staff reported that, on a system wide basis, actual NPC was 85.2 percent higher than base
NPC in 2023. Focusing specifically on Idaho, actual NPC was 75.3 percent above base rate
recovery. Despite these increases, Staff believed the Company generally operated prudently in the
face of a difficult deferral period. Staff based this conclusion on its analysis of (1) the actual
amounts of energy delivered and costs incurred relative to base amounts embedded in rates for the
deferral period; and (2) the reasonableness of the unit downtime for Company's generation
resources.
Staffs analysis led it to believe that the high NPC in 2023 arose largely from lower than
forecast generation from the Company's lowest cost energy resources(i.e.,hydro,coal, and wind),
resulting in heavier reliance on gas generation and market purchases to meet customer's demand
for energy. Staff believed a lack of available wind and hydro resources during the deferral period
caused the reduction in zero-fuel cost hydro and wind generation.Regarding coal generation, Staff
believed coal supply issues and transmission constraints between the Bridger coal plant and loads
to the west diminished generation.
The Company's reliance on gas generation and market purchases exacerbated matters as
the actual prices for this energy were 47 percent and 64.1 percent higher than that forecasted in
base rates. Furthermore, the shortfall in hydro, wind, and coal generation also resulted in
diminished Company sales into the wholesale market—a traditional means of offsetting actual
NPC to customers. However, Staff noted that some of the discrepancy between forecast and actual
sales arose from inaccuracies in the modeling used for base rates, which the Company intends to
improve during its next general rate case.
4"The amount the Company paid for energy under each QF contract over a reasonable energy price would be SITUS
(state)allocated to the state that approved the QF contract."Staff Comments at 5;citing Painter Direct at 10.
ORDER NO. 36207 4

According to Staff,the Company made prudent decisions in taking resources out of service
for various reasons. Despite noting significant downtime for the "Prospect 3"hydro unit and five
Swift hydro units, Staff believed the Company had legitimate reasons for the downtime its
resources experienced and that they were out of service for a reasonable period.
3. Proposed Rates
The Company proposed raising Schedule 94 rates by approximately 101.1 percent,
increasing base rate revenue by 10.5 percent. Staff verified that the Company's underlying
calculations for these rates are accurate and comply with prior Commission orders. However, Staff
recommended a lower proposed rate increase that reflects the removal of the costs for complying
with the WCCA. Specifically, Staff proposed a 93.7 percent increase in Schedule 94 rates, which
would raise base rate revenue by 9.7 percent. Under Staff s proposed rate, a typical Schedule 1
customer's monthly bill would increase by $6.85.
P41S COMMENTS
P4 focused its comments on two costs the Company proposed for inclusion in the ECAM
deferral and subsequent recovery from customers. First, like Staff, P4 opposed the recovery of
costs for complying with the WCCA. Second, P4 also opposed the recovery of costs for
compliance with the Ozone Transport Rule ("OTR").
1. WCCA Costs
P4 presented essentially the same rationale as Staff for opposing recovery of costs
associated with WCCA. That is, WCCA compliance costs arose from the actions of a single state
(i.e., Washington) and, therefore, that state should bear them. However, P4 cited some additional
persuasive authority supporting this argument.
P4 noted that the Wyoming Public Service Commission ("WPSC") recently denied the
Company's request to recover from Wyoming customers the cost of purchasing Greenhouse Gas
allowances to comply with the WCCA.S In doing so, the WPSC rejected an argument that the cost
of complying with the WCCA were analogous to Wyoming's wind tax and, therefore, subject to
allocation to all states under the 2020 PacifiCorp Inter-Jurisdictional Allocation Protocol ("2020
Protocol"). The WPSC determined that the WCCA is a state-specific initiative that was akin to a
5 See In re the Application of Rocky Mountain Power for Authority to Increase Its Retail Electric Service Rates by
Approximately$140.2 Million Per Year or 21.6 Percent and to Revise the Energy Cost Adjustment Mechanism. WPSC
Docket No.20000-63 3-ER-23,Memorandum Opinion,Finding,and Order¶211 (Jan.2,2024).
ORDER NO. 36207 5

renewable portfolio standard("RPS")as the legislative intent behind the WCCA is to reduce fossil
fuel generation. Because such portfolio standards are undisputedly situs under the 2020 protocol,
the WPSC reasoned that the WCCA should be also.6
2. The OTR
P4 described the OTR as the final plan of the Environmental Protection Agency ("EPA")
to limit emissions of nitrogen oxides in 23 states, including Utah and Wyoming. However,
according to P4, the Utah Attorney General sued the EPA, seeking to overturn the OTR, and the
Tenth Circuit stayed the federal plan. Accordingly, P4 opposed recovery of what it considered
unnecessary expenses to comply with the OTR, describing the costs as unrelated to any operating
condition the Company had to satisfy addressing emissions of nitrogen oxides.7
PIIC'S COMMENTS
PIIC similarly focused its comments on two issues. First, like Staff and P4, PIIC opposed
the recovery of costs for complying with the WCCA. Second, PIIC recommended amortizing the
proposed rate increase over three years to mitigate any overlap between that increase and the
Company's next general rate case.
1. WCCA Costs
PIIC opposed the Company recovering costs it incurred to comply with the WCCA.
However, according to PIIC, the WCCA resulted in more costs to the Company than the $42
million spent to purchase greenhouse gas allowances. Specifically, PIIC asserted that the cost of
the allowances affected the dispatch of energy from the Chehalis power plant, resulting in an
inefficient dispatch of generation. Due to the time constraints of this case, PIIC could not perform
the analysis necessary to estimate the effect of this inefficiency. However, PIIC noted that this
dispatch cost was estimated to be $9,559,205 on a company-wide basis in the Company's 2023
general rate case in Wyoming.
In addition to the dispatch efficiency issue, PIIC also opposed the Company's recovery of
the cost of WCCA allowances, arguing that the Company included the expenses in the ECAM by
improperly recording them in Federal Energy Regulatory Commission ("FERC") Account 555,
'P4 also noted that the Oregon Public Utility Commission denied recovery of WCCA costs from Oregon customers,
reasoning that such costs are part of a state-specific initiative properly allocated to Washington.See In re PacifiCorp,
dba Pacific Power, 2024 Transition Adjustment Mechanism,OPUC Docket No.UE 420,Order No.23-404(Oct.27,
2023).
7 P4 indicated the Company is seeking recovery of approximately$17 million for the OTR on a system basis.
ORDER NO. 36207 6

Purchased Power. PIIC argued that the costs for the allowances have nothing to do with purchased
power and should, therefore, be recorded in FERC Account 509, Allowances, which are not
included in the ECAM. Thus, PIIC reasoned that, regardless of the reasonableness of purchasing
the allowances, they cannot be included in the ECAM because the Company did not request
inclusion of FERC Account 509 in the ECAM and any change to the mechanism can only be
prospective.
Respecting the reasonableness of the allowances themselves, PIIC noted that the
Commission's prior decision to exclude WCCA costs from rates in Order No. 36015 is consistent
with other jurisdictions that have addressed the issue. The Oregon Public Utility Commission
("OPUC") did not allow the Company to include the cost of WCCA allowances in its 2024
Transition Adjustment Mechanism ("TAM") filing.$ As previously noted, the WPSC also denied
recovery of the WCCA allowances in the Company's 2023 general rate case.
PIIC also noted that, because of the separate allocation framework applicable to Chehalis
and no-cost allowances provided to Washington residents,the Company could potentially recover
allowance costs covering 112 percent of the cost of Chehalis from other states. For all the above
reasons, PIIC recommended that the Commission deny recovery of all costs incurred to comply
with the WCCA.
2. Amortization Period
PIIC also requested that the Commission amortize the rate increase proposed in this case
over three years. PIIC asserted that this will lead to more stable long-term rates by spreading the
increase over a three-year period, mitigating both the immediate impact of the increase and
diminishing any compounding rate effects from the Company's upcoming rate case. In support of
this proposal,PIIC noted that not only will the base NPC be reset in the Company's upcoming rate
case, but the price for natural gas has dropped and the issues the Company faced with its coal
operations have largely been resolved. Thus, PIIC indicated that it expects a significant decline in
the Company's ECAM deferrals going forward, reducing the likelihood of future rate pancaking
if the increase is amortized over three years.
Additionally,PIIC noted that it was not seeking to amortize the entire$62.4 million ECAM
deferral amount. Rather, it sought only to amortize the increase in the ECAM. Thus,under PIIC's
a PIIC describes the TAM as a docket that forecasts and establishes the NPC for the coming year.The OPUC's decision
to denying recovery of the allowances is currently on appeal to the Oregon Court of Appeals.
ORDER NO. 36207 7

proposal, the Company would recover $43,133,607 beginning on June 1, 2024, an approximate
3.5% rate increase. The Company would then recover an additional $10,886,666 in its next two
ECAM filings.
PUBLIC COMMENTS
One member of the public commented requesting the Commission deny the Company's
Application.
COMPANY REPLY COMMENTS
The Company disagreed with the other Parties' recommendation to disallow recovery of
costs it incurred to comply with the WCCA. The Company argued that disallowing recovery of
these costs would violate fundamental ratemaking and constitutional principles. Alternatively, the
Company argued that the Commission should remove the generation benefits of Chehalis from the
deferral balance if recovery of the WCCA compliance costs for operating the facility are
disallowed.
The Company contended that disallowing recovery of WCCA costs from Idaho customers
would violate the fundamental ratemaking principle of cost-causation. The Company reasoned
Chehalis benefits Idaho customers despite the additional WCCA compliance costs to operate it.
Because no party disputed the prudence of procuring WCCA allowances to operate Chehalis, the
Company reasoned Idaho customers should bear the actual costs of Chehalis generation from
which they benefit.
The Company also argued that the WCCA is like other taxes imposed by the federal and
other state governments on the Company. The Company warned that if policy shifts to Idaho
customers paying only for costs imposed by the state of Idaho, then it will become very difficult
for the Company to serve its Idaho customers with out-of-state resources. In support of this
argument, the Company cited the Wyoming wind tax, which is system allocated under the 2020
Protocol.
The Company further argued that denying recovery of the cost of complying with the
WCCA violates the dormant Commerce Clause by discriminating against the Company for
engaging in interstate commerce. Specifically, the Company contended that disallowing WCCA
costs would give Idaho customers an advantage and burden interstate commerce to the Company's
detriment.
ORDER NO. 36207 8

The Company also reasoned that the WCCA costs were properly allocated to Idaho under
the 2020 Protocol as a"System Resource." The Company observed that,under the 2020 Protocol,
generation resources are either"State Resources"or System Resources. Within the 2020 Protocol,
a Resource includes Company-owned generating units, like Chehalis.Under Section 3.1.2.1 of the
2020 Protocol,a Resource can be a State Resource when the resource was acquired to comply with
a"State-Specific Initiative." Because the Company did not acquire the physical Chehalis plant in
accordance with a State-specific initiative, the Company reasoned the subsequent acquisition of
greenhouse gas allowances to operate it under Washington state law did not convert it to a State
Resource.
The Company disagreed with PIIC's argument that WCCA costs should be recorded in
FERC Account 509. According to the Company, federal law currently in effect provides that only
allowances for sulfur dioxide emission should be recorded into FERC Account 509. Although a
recent change to federal regulations may require other allowances to be recorded into FERC
Account 509, that change will not be effective until January 1, 2025, and is not intended to impact
retail rates. See Accounting and Reporting Treatment of Certain Renewable Energy Assets, 183
FERC¶61,205, Order No. 898 (2023).
The Company also opposed P4's recommendation to disallow costs for complying with the
OTR. The Company noted that in preparing to comply with the OTR(which was to take effect on
August 4, 2023) it altered its thermal generating resources and dispatch through power purchases.
The Company represented that these efforts led to approximately$17 million in prudently incurred
costs. Although a stay from Tenth Circuit Court of Appeals one week before the implementation
date of the OTR relieved the Company the obligation to incur further compliance costs going
forward, the Company asserted that did not render imprudent the $17 million of costs already
incurred to prospectively comply with the OTR.
Finally, the Company opposed PIIC's three-year amortization proposal for two reasons.
First, amortizing incurred fuel expenses would impose regulatory lag on the Company's recovery
of those costs. The Company noted that the ECAM was designed for single-year recovery and,
despite the significant increase, that design should be honored. Second, extended recovery would
impose additional interest expenses and future price uncertainty on customers. Currently, the
ECAM imposes annual interest expenses on customers and, in the current environment, delaying
recovery could result in significant costs to customers in the form of higher interest costs.
ORDER NO. 36207 9

COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over the Company's Application and the issues in this
case under Title 61 of the Idaho Code including, Idaho Code §§ 61-501, -502, and -503. The
Commission is empowered to investigate rates, charges,rules,regulations,practices, and contracts
of all public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provisions of law, and to fix the same by order. Idaho Code
§§ 61-501, -502, and-503.
Based upon a review of the record, we find it fair, just, and reasonable to approve the
Company's Application with some exceptions. First, the Commission is particularly concerned
with, and ultimately rejects, the Company's request to recover WCCA compliance costs and
hereby disallows the recovery of WCCA costs. Second, we also reject P4's and PIIC's
recommendations to disallow recovery of the costs the Company incurred to comply with the OTR
and to amortize recovery of the amount of the ECAM deferral exceeding that embedded in base
rates over three years, respectively. Each of these contested issues are discussed more thoroughly
below.
1. WCCA Compliance Costs
The WCCA establishes regulatory requirements reducing certain greenhouse gas ("GHG")
emissions from generating plants in Washington State. One component of the WCCA is a Cap and
Invest Program, which establishes an initial limit (or "cap") on GHG emissions in Washington
State. RCW §§ 70A.65.005 through 70A.65.901. The Washington Department of Ecology
("WDE") maintains and enforces the cap through the auctioning and subsequent retirement of a
limited number of"allowances." See RCW § 70A.65.090(7)(a) (requiring a compliance account
through which allowances are transferred to the WDE for retirement); RCW § 70A.65.100
(requiring the WDE to distribute allowances via auctions).Each allowance authorizes the emission
of one metric ton of carbon dioxide equivalent. See RCW § 70A.65.010(1). To ensure that certain
legislative emissions limits are met, the WDE will issue a steadily decreasing number of
allowances in coming years. See RCW § 70A.65.070.
Although the WDE must allow for secondary transfer of purchased allowances to the
greatest extent possible, see id., the auctions are considered the "linchpin" of the cap-and-invest
program that will generate "substantial revenue that must, by law be invested in critical climate
projects throughout" in Washington State. Dep't of Ecology State of Wash.,
ORDER NO. 36207 10

https:Hecology.wa.gov/air-climate/climate-commitmentact/auction-proceeds (last visited May 28,
2024); see also RCW §§ 70A.65.100, 70A.65.230, 70A.65.240, 70A.65.250, 70A.65.260,
70A.65.270, 70A.65.280.
The Company owns and operates a natural gas-fired generating facility in Chehalis,
Washington, that exports a portion of the electricity it generates there to Idaho customers. The
Chehalis facility emits carbon dioxide for which the Company must purchase and retire allowances
through the WDE.Although the WDE provides some allowances to the Company for the Chehalis
facility at no cost, these no-cost allowances must be allocated only to Washington State retail
customers. See RCW §§ 70A.65.110, 70A.65.120, 70A.65.130. The Company seeks authorization
to recover about $2.3 million from Idaho customers—an amount representing Idaho's
jurisdictional share of the cost to purchase the remaining allowances necessary to operate the
Chehalis facility and export electricity to customers outside of Washington.
We conclude that allowing recovery of costs incurred to comply with the WCCA from
Idaho customers would violate the 2020 Protocol, which governs the allocation of costs and
benefits of Company resources (including Company-owned generating facilities like the Chehalis
facility) across the jurisdictions in which the Company operates.9
We reject the Company's argument that the costs it incurred to comply with the WCCA
are like other taxes imposed on the Company, like the Wyoming Wind Tax. See Wyo. Stat. Ann. §
39-22-104 (imposing a tax of$1.00 on every MWh of wind energy generated in state). Rather,we
conclude the WCCA is more akin to an RPS as it is designed to reduce the use of fossil fuel
generation to serve load. The 2020 Protocol defines a"Portfolio Standard"as "a law or regulation
that requires [the Company] to acquire . . . [r]esources in a prescribed manner." 2020 Protocol,
Section 3.1.2.1. Although the Company owned the Chehalis generating facility before the WCCA
was enacted, it lost the right to operate it to generate electricity to serve customers outside of
Washington State without purchasing allowances when the legislation became effective. The
Company did not acquire that right again until after it obtained allowances as prescribed by the
Washington State legislature. The costs of resource procurement standards like this are situs-
assigned under the 2020 Protocol. Thus, costs the Company incurred to comply with the WCCA
are appropriately assigned to customers in Washington State.
9 The 2020 Protocol was approved in Order No. 34640.
ORDER NO. 36207 11

Other aspects of the WCCA buttress this conclusion. For example, the Washington State
legislature does not fix the cost of allowances like other taxes. Rather, that cost is determined at
an auction conducted by the WDE. Moreover,while isolated WCCA provisions might resemble a
tax or generation-dispatch costs,the complete statutory scheme goes beyond this by providing no-
cost allowances to Washington State retail customers alone.
The WDE discussed the rationale behind the provision of these no-cost allowances in
federal district court litigation concerning the WCCA. Specifically, the WDE indicated that the
no-cost allowances were linked to another Washington State climate initiative, stating:
[T]he Clean Energy Transformation Act (CETA), requires utilities serving
Washington customers to reduce their greenhouse gas emissions to neutral by 2030
and to zero by 2045. Critically, these requirements do not apply to generation for
out-of-state customers. Thus, the function of the no cost allowances in the Climate
Commitment Act is to avoid double-charging Washington customers for the costs
of the energy transition to non-emitting generation.10
The same year CETA requires the complete elimination of fossil-fuel generators from the
portfolios of electric utilities, the provision of cost-free allowances under the WCCA ends. Thus,
the CETA and WCCA work together to implement a state-specific initiative by creating portfolio
standards under CETA and then distributing no-cost allowances to CETA-obligated utilities
through the WCCA. The 2020 Protocol is designed and intended to isolate such state-specific
policy costs and recover those costs from customers in the states where the policies are created.
2. OTR Compliance Costs
We find it fair,just, and reasonable to allow the Company to recover from Idaho customers
Idaho's jurisdictional share of the costs incurred to comply with the OTR,a federal rule. Although
the Company did not ultimately have to comply with the OTR, that does not retroactively render
imprudent the costs it incurred preparing to comply.Nor does the record show that the Company's
preparations to comply with the OTR were otherwise imprudent.
3. Amortization of Recovery
We also find it fair,just, and reasonable to allow the Company to recover the 2023 ECAM
deferral in a single year.Although the deferral is substantial, amortizing its recovery is not without
additional costs or additional risks for customers. For example, interest would continue to accrue
"Invenergy Thermal LLC, and Grays Harbor Energy LLC v. Laura Watson, in her official capacity as Director of
the Washington State Department of Ecology,Defendant,("Invenergy v. Ecology")Defendant's Motion to Dismiss,
(Feb. 16,2023),Western District of Washington Case No. 3:22-cv-05967.
ORDER NO. 36207 12

on the uncollected deferral over the course of the amortization period, increasing the total amount
recovered from customers. Additionally, the Company could be faced with another substantial
ECAM deferral in the next two years, while it is still recovering part of the 2023 deferral. If this
hypothetical occurred, customers would incur additional interest costs only to obtain pancaking
rates. Moreover, the ECAM was designed for single-year recovery of deferred costs. Considering
the cost and risk a three-year amortization would entail,we find it reasonable to honor the original
design of the 2023 ECAM in this case and allow the Company to recover the ECAM deferral
allowed here in a single year.
In sum, we disallow recovery of the costs the Company incurred to comply with the
WCCA, approve$60,093,960 million in deferred costs from the deferral period beginning January
1, 2023, through December 31, 2023, and a corresponding increase to Electric Service Schedule
No. 94, Energy Cost Adjustment. Because these amounts differ from those proposed in the
Application, we direct the Company to submit as a compliance filing a revised Schedule No. 94
tariff reflecting the amounts approved in this Order within 15 days.
ORDER
IT IS HEREBY ORDERED that the Company's Application for deferred costs from the
deferral period beginning January 1, 2023, through December 31, 2023, in a revised amount of
$60,093,960 (which excludes costs incurred to comply with the WCCA) is approved, effective
June 1, 2024.
IT IS FURTHER ORDERED that the Company submit within 15 days of the issuance of
this order a revised Schedule No. 94 tariff reflecting the amounts approved in this Order as a
compliance filing.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date upon this Order regarding any
matter decided in this Order. Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. See Idaho Code §§ 61-
626.
ORDER NO. 36207 13

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 3I't day of
May 2024.
ERIC ANDERSON, PRESIDENT
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J R. HAMMOND JR., COMMISSIONER
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EDWARD LODGE, OM SSIONER
ATTEST:
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Commission Secretary
I:\Legal\ELECTRIC\PAC-E-24-05_ECAM\orders\PACE2405_final_at.docx
ORDER NO. 36207 14

Office of the Secretary
Service Date
October 18,2024
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN ) CASE NO. PAC-E-24-05
POWER'S APPLICATION FOR APPROVAL )
OF $62.4 MILLION ECAM DEFERRAL ) ORDER NO. 36367
On April 1, 2024, PacifiCorp dba Rocky Mountain Power ("Company") applied for
authorization to adjust its rates under the Energy Cost Adjustment Mechanism (`SCAM"). The
Company sought an order approving approximately $62.4 million in ECAM deferred costs and a
10.5 percent increase to Electric Service Schedule No. 94, Energy Cost Adjustment ("Schedule
94"). If the adjustment were approved as filed,the monthly bill of an average residential customer
using 783 kilowatt-hours of electricity would increase by about$7.39. The Company requested its
proposed adjustment be processed by Modified Procedure and become effective on June 1, 2024.
On May 31, 2024, the Commission issued a Final Order that disallowed recovery of costs
incurred to comply with the Washington Climate Commitment Act ("WCCA") and authorized a
revised ECAM deferral amount of$60,093,960. Order No. 36207.
On June 21, 2024, the Company filed a Petition for Reconsideration ("Petition") of Order
No. 36207.The Company argued the Commission erred by(1)misinterpreting the 2020 PacifiCorp
Inter-Jurisidictional Protocol ("2020 Protocol") in various ways; (2) impermissibly separating the
costs and benefits of its natural gas-fired generating facility in Chehalis,Washington("Chehalis");
and (3) discriminating against the Company for engaging in interstate commerce. Alternatively,
the Company asserted that the Commission should revise Order No. 36207 to exclude both the
costs and benefits of Chehalis from Idaho customers' rates—effectively removing Chehalis from
service of Idaho customers.
On July 19, 2024, the Commission granted the Company's Petition, setting comment
deadlines, authorizing the parties to submit additional evidence, and posing some initial questions
for the Company to answer. Order No. 36247. The Company responded to the questions the
Commission posed, and then Commission Staff("Staff') filed comments to which the Company
replied with argument and additional evidence.
Having reviewed the record in its entirety and additional arguments lodged by the Parties
on reconsideration, we now issue this Order denying the Company's Petition.
ORDER NO. 36367 1

ORDER NO. 36207
As stated, Order No. 36207 authorized the Company to recover only $60,093,960 of the
approximately$62.4 million in ECAM deferred costs sought in its Application. The only expense
for which the Commission disallowed recovery was costs the Company incurred to comply with
the WCCA. As relevant to this disallowance, Order No. 36207 provides:
We conclude that allowing recovery of costs incurred to comply with the WCCA
from Idaho customers would violate the 2020 Protocol, which governs the
allocation of costs and benefits of Company resources (including Company-owned
generating facilities like the Chehalis facility) across the jurisdictions in which the
Company operates.
We reject the Company's argument that the costs it incurred to comply with the
WCCA are like other taxes imposed on the Company,like the Wyoming Wind Tax.
See Wyo. Stat. Ann. § 39-22-104 (imposing a tax of$1.00 on every MWh of wind
energy generated in state). Rather, we conclude the WCCA is more akin to [a
Renewable Portfolio Standard] as it is designed to reduce the use of fossil fuel
generation to serve load. The 2020 Protocol defines a "Portfolio Standard" as "a
law or regulation that requires [the Company] to acquire . . . [r]esources in a
prescribed manner."2020 Protocol, Section 3.1.2.1.Although the Company owned
the Chehalis generating facility before the WCCA was enacted, it lost the right to
operate it to generate electricity to serve customers outside of Washington State
without purchasing allowances when the legislation became effective. The
Company did not acquire that right again until after it obtained allowances as
prescribed by the Washington State legislature. The costs of resource procurement
standards like this are situs-assigned under the 2020 Protocol. Thus, costs the
Company incurred to comply with the WCCA are appropriately assigned to
customers in Washington State.
Order No. 36207 at 11 (Footnotes omitted.)
Order No. 36207 cited other aspects of the WCCA that support this conclusion.
Specifically, Order No. 36207 noted that the cost of WCCA allowances is determined in an
auction, not by the Washington state legislature as with other taxes. Moreover, despite
acknowledging that isolated WCCA provisions resemble a tax or generation-dispatch costs, the
Commission reasoned that the provision of no-cost allowances to the Company only for customers
served in Washington state distinguished the WCCA from a tax.
Order No. 36207 also examined the link between the WCCA and another Washington state
climate initiative—the Clean Energy Transformation Act ("CETA"). Washington state officials
have indicated in federal court proceedings that no-cost allowances are provided under the WCCA
ORDER NO. 36367 2

to ensure that Washington customers do not bear the costs associated with transitioning to non-
greenhouse gas emitting generation under both the WCCA and CETA. Order No. 36207 reasoned
that the portfolio standards established under CETA and provision of no-cost allowances under
WCCA constituted a state-specific initiative for which Idaho customers should not bear the cost.
The Commission noted that costs for such state-specific policies should be allocated to customers
served in the state creating the policies.
STAFF COMMENTS ON RECONSIDERATION
Staff urged the Commission to reject the Company's request to reconsider the disallowance
of WCCA compliance costs associated with Chehalis. According to Staff,the Commission did not
err by concluding that these costs result from a Portfolio Standard, making them properly situs
assigned to Washington under the 2020 Protocol. Furthermore, Staff argued that, even if the
WCCA is not a Portfolio Standard, the Commission should not authorize recovery of costs to
comply with it because doing so would not be fair, just, and reasonable. Consequently, Staff
recommended that the Commission neither allow the Company to recover WCCA compliance
costs, nor remove the benefits of generation from Chehalis from Idaho rates.
1. The WCCA is a Portfolio Standard.
Staff argued that the Commission properly concluded that the WCCA is a Portfolio
Standard under the 2020 Protocol. In support of this argument, Staff noted that the 2020 Protocol
defines a "Portfolio Standard" as, among other things, "a law or regulation that requires [the
Company] to acquire . . . Resources in a prescribed manner."2020 Protocol Section 3.1.2.1. Staff
characterized the Company's reading of Order No. 36207 as implying that WCCA allowances are
discrete "Resources"under the 2020 Protocol.
However, Staff believed it more reasonable to interpret Order No. 36207 as the
Commission concluding that the WCCA deprived the Company of the right to lawfully operate
Chehalis to generate electricity without obtaining and retiring allowances as required by the
WCCA. That is, Staff interpreted Order No. 36207 as expressing a Commission determination that
the WCCA effectively rendered Chehalis inoperable as an electric generation facility unless the
Company obtained allowances. Consequently, Staff reasoned that the Commission's conclusion
that the WCCA was a Portfolio Standard under the 2020 Protocol was not error.
ORDER NO. 36367 3

2. Including WCCA compliance costs in Idaho rates is not fair,just, and reasonable.
Staff further argued that allowing the Company to recover WCCA compliance costs
violates two principles underpinning the 2020 Protocol. According to Staff, the 2020 Protocol
contemplates the fair allocation of costs between the states the Company serves while minimizing
the rate effects of state-specific policies, like the WCCA. Because allowing recovery of WCCA
compliance cost violates both these principles, Staff contended that allowing such recovery would
not be fair,just, and reasonable. Consequently, Staff asserted that the Commission should disallow
recovery of such costs, even if the WCCA is not a Portfolio Standard under the 2020 Protocol. In
support of this argument, Staff noted that the 2020 Protocol does not limit the Commission's
authority to determine whether rates are fair,just, and reasonable or to consider changes in laws,
regulations, or circumstances on inter jurisdictional allocation policies when evaluating rates.
Although inclusion of certain out-of-state generation taxes in Idaho rates has been deemed
fair,just, and reasonable, Staff distinguished such taxes from WCCA compliance costs. Staff cited
the Wyoming Wind Tax as an example of such a tax included in Idaho rates. The Wyoming Wind
Tax is a flat tax imposed on all wind energy generated in Wyoming, including that consumed in
Wyoming. See Wyo. Stat. Ann. § 39-22-104. The WCCA, however, provides no-cost allowances
for generation serving Washington ratepayers only, essentially exempting Washington residents
from WCCA compliance costs. RCW §§ 70A.65.110, 70A.65.120, 70A.65.130. Consequently,
Staff asserted that the Commission should disallow recovery of WCCA compliance costs under
Section 1 of the 2020 Protocol, even if other provisions of the 2020 Protocol would require
allocation of such costs to Idaho.
Staff also contrasted WCCA compliance costs with the treatment of rates for Public Utility
Regulatory Policies Act ("PURPA") Qualifying Facilities ("QF") under the 2020 Protocol. If the
price of a QF exceeds reasonable energy prices, the 2020 Protocol requires that any amount
exceeding the reasonable energy price be situs assigned to the state authorizing the QF contract.
2020 Protocol Section 4.4.2.1. Staff reasoned that overpriced QF rates are, as a practical matter,
like WCCA compliance costs because the Washington legislature artificially inflated the price of
exported energy generated at Chehalis by requiring the Company to first purchase allowances for
exported generation. Accordingly, Staff argued that the WCCA should receive similar treatment
to QF rates under the 2020 Protocol.
ORDER NO. 36367 4

3. Disallowing recovery of WCCA compliance costs does not violate the Dormant
Commerce Clause.
Staff also challenged the Company's assertion that disallowing recovery of WCCA
compliance costs impermissibly discriminates against the Company as an interstate utility in
violation of the Dormant Commerce Clause. In this vein, Staff again noted that Washington state
provides the Company with no-cost allowances to cover electricity generated by Chehalis
distributed to Washington customers. Washington state does this to insulate its residents from the
cost for complying with both the CETA and the WCCA which the Company would pass on.
However, Staff asserted that on its face the disparity between the $42 million of WCCA
compliance costs the Company incurred in 2023 and the $336,219 of CETA compliance costs the
Company incurred the same year suggested that Washington state's choice to offer no-cost
allowances favored its own residents instead of equalizing compliance costs. Accordingly, Staff
argued that any Dormant Commerce Clause violation associated with WCCA compliance costs
occurred when the Company initially incurred the costs.
4. The impact of removing Chehalis from Idaho rates.
Staff also challenged the Company's calculation of the impact to Idaho ratepayers if
Chehalis' generation is removed from Idaho rates. According to the Company,removing Chehalis
from Idaho rates would increase Idaho's Net Power Cost ("NPC") by $23.6 million. However,
Staff took exception with the Company's inclusion of the capacity deficiency penalty from the
Western Resource Adequacy Program("WRAP")to calculate replacement capacity.According to
Staff,the Company would not actually be capacity deficient if Chehalis were removed from Idaho
rates. Rather, Staff argued the Company would be reallocating existing generation to Idaho
ratepayer's detriment. Consequently, Staff reasoned that incurring the capacity deficiency penalty
would be unreasonable. Without including the capacity penalty, the capacity costs of removing
Chehalis drops from $119 million on a system basis to $46 million on an Idaho basis.
Staff also disagreed with the Company's use of the hourly Mid-Columbia("Mid-C")prices
to replace the energy supplied by Chehalis. Instead, Staff proposed using the monthly average cost
per megawatt-hour of gas generation on the Company's system because WRAP replacement costs
are based on a replacement gas plant. Staff asserted that this would reduce the costs of replacing
Chehalis by $99 million on a system basis.
ORDER NO. 36367 5

Alternatively,if the Commission deems the cost of gas generation improper, Staff proposed
using the Company's eastern Balancing Area Authority (`BAA") Locational Marginal Price
("LMP") from the Energy Imbalance Market ("EIM") (or the Energy Day Ahead Market when
that becomes available). Staff believed this rate to be more appropriate than Mid-C market prices,
as the Company would purchase replacement power from the LMP.If LMP prices are used instead
of Mid-C, that would reduce the Company's estimated cost for replacing Chehalis by about $67
million on a system basis. Using LMP prices reduces the replacement energy cost from $190
million to $123 million on a system basis.
Staff also disagreed with the Company's use of rate base and expenses from 2020 when
calculating the cost of removing Chehalis from Idaho rates. Staff noted that the Company has a
general rate case pending before the Commission (Case No. PAC-E-24-04) in which it has
provided updated fuel costs from 2023. Using the updated 2023 fuel costs would increase the cost
of removing Chehalis by about $242,000.'
According to Staff s calculations, the total cost of removing Chehalis from Idaho rates
would be $4.3 million if monthly average gas cost is used or $2.6 million using the LMP price
from the EIM. Staff suggested that removing Chehalis entirely from Idaho rates could cost as little
as $2.6 million further demonstrated that including $2.4 million in WCCA compliance costs in
Idaho rates is not fair,just, and reasonable.
COMPANY REPLY COMMENTS ON RECONSIDERATION
The Company challenged Staff s interpretation of the WCCA as effectively depriving the
Company of the right to lawfully operate Chehalis. According to the Company, the text of the
WCCA and its associated regulations do not support this interpretation. In this vein, the Company
noted that the WCCA is generally enforced with financial penalties—not injunctions that would
stop facilities from generating power. Additionally, the Company argued that interpreting the
WCCA as having deprived it of a property right in Chehalis could have unforeseen consequences
on future proceedings.
Similarly, the Company challenged Staffs assertion that the WCCA is a Portfolio
Standard under the 2020 Protocol. Specifically, the Company stated that the WCCA is not a
1 Staff fiirther noted that the Company omitted capacity costs for three months and miscalculated capacity costs for
another month.
ORDER NO. 36367 6

Portfolio Standard because it does not require the Company to procure a Resource, much less
procure it in a prescribed manner. Rather, the Company viewed the WCCA as discouraging the
construction of new greenhouse gas emitting generation facilities.
The Company further argued that conferring the benefits of Chehalis to Idaho customers
without paying for its full prudent costs is not fair,just,and reasonable.According to the Company,
disallowing the recovery of prudent expenses (like WCCA compliance costs) without removing
the benefits conflicts with the 2020 Protocol and pre-existing fundamental ratemaking principles.
The Company also disputed Staff s analysis of the impact of removing Chehalis from Idaho
rates. First, the Company asserted that removing Chehalis would increase Idaho NPC by $7.9
million. After challenging various aspects of Staffs analysis, the Company asserted that its
calculations should be used to determine the cost of removing Chehalis from Idaho rates.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over the Company's Application and the issues in this
case under Title 61 of the Idaho Code including, Idaho Code §§ 61-501, -502, and -503. The
Commission is empowered to investigate rates, charges,rules,regulations,practices, and contracts
of all public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provisions of law, and to fix the same by order. Idaho Code
§§ 61-501, -502, and-503.
Under Idaho Code§ 61-626,the Commission may abrogate or change one of its orders that
it determines after reconsideration is unjust, unwarranted, or should be changed. This permits the
Commission to correct any errors in the original order before appellate review. See Washington
Water Power Co. v. Kootenai Env'tAll., 99 Idaho 875, 879, 591 P.2d 122, 126 (1979). A petition
for reconsideration must state why the order to be reconsidered, or any issued decided therein, is
unreasonable, unlawful, erroneous, or not in conformity with the law. IDAPA 31.91.01.331.01.
After reviewing the entire record in this case, including the comments, additional materials that
were filed,and arguments provided by the parties on reconsideration,we sustain our prior decision
disallowing recovery of WCCA compliance costs for the reasons set forth below.
1. WCCA compliance costs are properly allocated to Washington State under the
2020 Protocol
The 2020 Protocol is a method of allocating components of the Company's service between
the jurisdictions in which it operates for use in the Company's rate setting proceedings. The 2020
ORDER NO. 36367 7

Protocol was developed by commission staff members, regulatory agencies, and other interested
groups from states in which the Company operates for use on an interim basis while a long-term
allocation and assignment method was developed. The Commission initially approved the 2020
Protocol in Order No. 34640, and subsequently extended its approval through December 31,2025,
in Order No. 35984.
The 2020 Protocol allocates the costs and benefits of a Company-owned generating facility,
like Chehalis,by first assigning the facility to one of two categories: "State Resources"or"System
Resources." 2020 Protocol, Section 3.1.2. Under the 2020 Protocol, State Resources consist of
only "Demand-Side Management Programs," "Portfolio Standards," and "State-Specific
Initiatives."The 2020 Protocol allocates the costs associated with a Portfolio Standard that exceed
those the Company otherwise would have incurred to the jurisdiction that adopted the Portfolio
Standard. 2020 Protocol, Section 3.1.2.1. Stated differently, the 2020 Protocol requires a state to
bear the additional costs resulting from a Portfolio Standard. However,the 2020 Protocol does not
contain a specific provision expressly allocating the benefits of a Portfolio Standard.
In Order No. 36207, we concluded that the WCCA, at least as applied to electric utilities,
is akin to a Portfolio Standard and, therefore, the cost to comply with it should be allocated to
Washington state. Understanding why this is so,requires an understanding of both the structure of
the WCCA and its peculiar application to electric utilities. The WCCA aims to reduce greenhouse
gas emissions by instituting a"cap and invest program."RCW§ 70A.65.005, .010(58), .060—.080.
The WCCA empowers the Washington Department of Ecology ("WDE") to cap emissions of
certain greenhouse gases by large emitters—called"covered entities."RCW§ 70A.65.080(1). The
Company qualifies as a covered entity because of the greenhouse gas emissions from Chehalis.
Covered entities must obtain and retire allowances for every metric ton of carbon dioxide
gas equivalent they emit under the WCCA. See RCW § 70A.65.010(1) (defining an"Allowance"
as authorization to emit up to one metric ton of carbon dioxide equivalent). Failure to do so can
result in the imposition of"penalty allowances" or monetary sanctions ranging from $10,000 to
$50,000 per day, depending on the violation. See RCW 70A.65.200(2)—(5); Washington
Administrative Code("WAC") 173.446-610(2)—(6). Generally, covered entities obtain allowances
through auctions the WDE conducts.See RCW§ 70A.65.100.The WDE then uses the funds raised
in the auctions on climate change and environmental justice projects offered exclusively in
Washington state. RCW § 70A.65.100(7), .230. However, electric utilities subject to CETA (like
ORDER NO. 36367 8

the Company)receive some allowances for free.RCW§ 70A.65.110-130. Essentially,the WCCA
and WDE regulations provide electric utilities with free allowances to cover the forecasted
emissions associated with servicing customers in Washington State. WAC 173-446-230. The
purpose of these no-cost allowances is to protect customers in Washington from paying the
incremental costs associated with transitioning to non-greenhouse gas emitting generation
resulting from both CETA and the WCCA. See RCW § 70A.65.120(1). The Washington state
legislature chose to provide no-cost allowances for Washington customers only. In sum, the
WCCA requires the Company to obtain and retire allowances to operate Chehalis to generate
electricity. Some of these allowances the Company must pay for while it receives others—
specifically those applied to generation to serve customers in Washington state—for free.
The next issue we must address is how the above-described statutory scheme interacts with
the 2020 Protocol. Staff contends that the WCCA constitutes a Portfolio Standard under the 2020
Protocol, the costs of which are properly allocated to Washington state. As stated, the 2020
Protocol allocates the costs of a Portfolio Standard that exceed the costs the Company otherwise
incurred to the jurisdiction that adopted the Portfolio Standard. 2020 Protocol, Section 3.1.2.1. The
2020 Protocol defines a Portfolio Standard as "a law or regulation that requires [the Company] to
acquire: (a) a particular type of Resource, (b) a particular quantity of Resources, (c) Resources in
a prescribed manner, or (d) Resources located in a particular geographic area." 2020 Protocol,
Appendix A at 6 (defining "Portfolio Standard"). Although Chehalis is a "Resource" under the
2020 Protocol, the greenhouse gas allowances the Company had to obtain to operate Chehalis are
not. See 2020 Protocol, Appendix A at 7 (defining the term "Resource" to mean "a Company-
owned generating unit,plan,mine, long-term Wholesale Contract, Short-Term Purchase and Sale,
Non-firm Purchase and Sale, or QF contract."). Consequently, to determine whether the WCCA
constitutes a Portfolio Standard, we must consider its effects on the Company's relationship with
Chehalis.
It is undisputed that the Company owned Chehalis prior to enactment of the WCCA. It is
also undisputed that the WCCA did not deprive the Company of legal title to Chehalis. However,
as described above, the Company could not operate Chehalis without obtaining allowances via
purchase at auction, provision of free allowances, involuntary imposition of penalty allowances,
or some other means. In other words, the WCCA prescribes processes the Company must follow
to operate Chehalis to produce electricity (e.g., obtaining and retiring allowances).
ORDER NO. 36367 9

The remaining question we must address is whether the WCCA required the Company to
"acquire" Chehalis by obtaining greenhouse gas allowances. The Company contends it does not
because (1)the Company owned Chehalis before the WCCA went into effect; and(2)the WCCA
does not mandate the acquisition of any Resource. We disagree. The Company does not acquire a
Resource within the context of a Portfolio Standard only by obtaining ownership of it. Indeed,
contracts for the purchase and sale of power,which are not tangible property subject to ownership,
are Resources under the 2020 Protocol. Id. Considering this, we conclude that the Company has
not acquired a Resource under the 2020 Protocol if it does not have the right to lawfully employ
the Resource to provide electrical service to customers without complying with the WCCA.
Accordingly, we affirm our conclusion from Order No. 36207 that the Company lost the
right to lawfully operate Chehalis to generate electricity without obtaining allowances when the
WCCA became effective. The Company reacquired this right by obtaining WCCA allowances as
prescribed by the Washington state legislature. Consequently, the costs the Company incurred to
comply with the WCCA that exceed the cost the Company otherwise would have incurred (e.g.,
the cost of purchasing allowances) are appropriately assigned to customers in Washington state.
2. Allowing the recovery of WCCA compliance costs in Idaho rates would not be
fair,just, and reasonable.
The 2020 Protocol was designed to provide an allocation method that would result in the
setting of fair,just, and reasonable rates for the Company's electric service based on a variety of
scenarios.The 2020 Protocol specifically considered the treatment in rates of state-specific policies
and portfolio standards and how those would be allocated between the states. Section 1 of the 2020
Protocol expressly provides that it is not "intended to abrogate any Commission's right or
obligation to: (1) determine fair, just, and reasonable rates based upon applicable laws and the
record established in rate proceedings conducted by the Commission;" or"(2) consider the effect
of changes in laws, regulations, or circumstances on inter jurisdictional allocation policies and
procedures when determining fair,just, and reasonable rates. . . ." 2020 Protocol, Section 1 at 3.
For the reasons set forth below, even if the 2020 Protocol would otherwise result in the recovery
of WCCA compliance costs through Idaho rates, we decline to authorize such recovery because
doing so would not be fair,just, and reasonable.
The Company contends that allowing Idaho customers the benefit of Chehalis' generation
without paying a share of WCCA compliance costs conflicts with the ratemaking principle of cost
ORDER NO. 36367 10

causation. This principle generally holds the customer responsible for the costs associated with
providing the Company's service. However, even in the 2020 Protocol the principle of cost
causation has not been applied in the rigid manner the Company urges. For example,the treatment
of rates for PURPA QFs under the 2020 Protocol shows that the principle of cost causation does
not compel allocation of single state's artificial inflation of energy prices to all the Company's
customers on a system basis.
Under the 2020 Protocol, costs of a QF power purchase agreement("PPA") executed after
December 31, 2019, which are above the forecasted reasonable energy price are allocated to the
state that approved the PPA (situs assigned to the state where the QF is located). 2020 Protocol
Section 4.4.2.1. If a state happens to have inflated QF rates for whatever reason, customers in the
state where that QF is located pay for the inflated costs of complying with the rates authorized by
the state commission for QFs in that state. This ensures states that do not offer high rates for QFs
are not required to pay for another state's inflated QF rates. QF and WCCA compliance costs are
similar in both formation and effect. Both arise from a single state's unilateral decision, and both
artificially inflate costs to generate or supply electricity. Accordingly, it follows that, like
overpriced QF rates, the amount the WCCA increased the costs the Company otherwise would
have incurred should be allocated to the jurisdiction that caused the increase (i.e., Washington).
Furthermore, allowing the Company to recover WCCA compliance costs from Idaho
customers would conflict with one of our primary functions: preventing rate discrimination.
Although not directly applicable in this case, Idaho Code § 61-315 prohibits public utilities in
Idaho from charging discriminatory rates or maintaining unreasonable rate disparities. Allowing
the Company to recover WCCA compliance costs would, in practical effect, result in the creation
of discriminatory customer classes,consisting of the Company's Idaho customers who would have
to pay for greenhouse gas allowances and the Company's Washington customers who would not.
In sum, requiring Idaho ratepayers to bear the cost of a unilateral Washington policy
decision that is not equally applied to its own residents is not fair,just, and reasonable which is in
direct conflict with Idaho Code § 61-502. Similar discriminatory cost increases authorized by
another state would not be recoverable for Idaho customers under the 2020 Protocol.Accordingly,
even the WCCA were not a Portfolio Standard under the 2020 Protocol, we would not allow
recovery of such costs in Idaho rates because doing so is not just and reasonable. See Idaho Code
§ 61-301 (requiring all rates charged by public utilities to be just and reasonable).
ORDER NO. 36367 11

3. Disallowing the recovery of WCCA compliance costs in Idaho rates does not
violate the Dormant Commerce Clause.
The Company argues that disallowing recovery of WCCA compliance costs violates the
Dormant Commerce Clause of the United States Constitution. Article I, Section 8, clause 3 of the
United States Constitution grants Congress authority"[t]o regulate commerce ... among the several
states...." The clause also has a negative, or "dormant," aspect, implicitly preempting state
interference with interstate commerce. United Haulers, Ass'n, v. Oneida Herkimer Solid Waste
Mgmt. Auth., 550 U.S. 330, 338 (2007).
The Dormant Commerce Clause protects markets and market participants. Gen. Motors
Corp. v. Tracy, 519 U.S. 278, 300(1997). Thus,the Dormant Commerce Clause is inapplicable in
the absence of(1)actual or prospective competition between entities in an identifiable market; and
(2) state action expressly discriminating against or unduly burdening interstate commerce. Id.
Additionally, this impact cannot be merely incidental. United States v. Lopez, 514 U.S. 549, 559
(1995).
The Company contends that disallowing recovery of WCCA compliance costs violates the
Dormant Commerce Clause because doing so has the practical effect of discriminating against it
for engaging in interstate operations. This misstates the focus of the Dormant Commerce Clause
analysis. As indicated above, a Dormant Commerce Clause violation arises from state action
discriminating against interstate commerce. Id. Thus, it is critical to differentiate between state
actions that discriminate or burden interstate commerce and those that distribute the effects of
discrimination or burdens imposed by another state.
The Company asserts that, if we do not permit it to pass on to Idaho customers costs that
were already imposed by Washington state, we would be effectively discriminating against
interstate commerce. We disagree. Any decision we make regarding the recovery of WCCA
compliance costs in Idaho rates will not impose a new burden on the Company. Regardless of
whether we allow the Company to pass the costs of greenhouse gas allowances for its Chehalis
emissions to Idaho customers, the Company will remain the entity required to obtain allowances
under the WCCA. The only thing that will change is the identity of the party to the interstate
transaction bearing the ultimate financial burden. However, any decision we make allocating that
cost will not burden interstate commerce anymore than it already is. Additionally, the WCCA
facially discriminates against out-of-state interests by providing no-cost allowances to the
ORDER NO. 36367 12

Company for greenhouse gas emissions generated to serve Washington customers without
providing the same no-cost allowances for emissions associated with serving the retail load of the
Company's other jurisdictions. Allowing the Company to pass the WCCA compliance costs it
incurred to Idaho customers would not eliminate this discrimination against interstate commerce.
It would merely shift the effects of the discrimination from the Company to Idaho customers.
Consequently, the Company's argument that disallowing recovery of WCCA compliance costs
violates the Dormant Commerce Clause fails.
4. Removing the benefits of Chehalis from Idaho rates would not be fair, just, and
reasonable.
The Company argues,in the alternative,that the Commission should remove the generation
benefits of Chehalis from the deferral balance if recovery of the WCCA costs for operating the
facility are disallowed. Based on our conclusion that the WCCA compliance costs the Company
incurred are properly allocated to Washington state, we further conclude that it would not be fair,
just, and reasonable to remove the benefits of Chehalis' generation from Idaho rates due to the
disallowance of those costs.
ORDER
IT IS HEREBY ORDERED that, for the reasons stated above, the Company's Petition for
Reconsideration is DENIED.
THIS IS A FINAL ORDER ON RECONSIDERATION.Any party aggrieved by this Order
may appeal to the Supreme Court of Idaho pursuant to the Public Utilities Law and the Idaho
Appellate Rules. See Idaho Code § 61-627.
ORDER NO. 36367 13

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 181h day of
October 2024.
ERIC ANDERSON, PRESIDENT
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R. HAMMOND JR., COMMISSIONER
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EDWARD LODGE, COMNVSIONER
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Commission Secreta
I:\Legal\ELECTRIC\PAC-E-24-05_ECAM\orders\PACE2405_final2_at.docx
ORDER NO. 36367 14